Unprecedented Fraud Enforcement Actions Across the Southeast Resulting from Federal-State Partnerships

OXFORD, MS - U.S. Attorney for the Northern District of Mississippi, Scott F. Leary, joined Assistant Attorney General Colin McDonald of the Justice Department's National Fraud Enforcement Division, other DOJ leaders, and federal and state law enforcement partners for a press conference announcing a series of significant fraud enforcement actions across the Southeastern United States. These recent cases involve $350 million in losses of SNAP benefits, Small Business Administration (SBA) loans, housing benefits and tax fraud. The Division separately announced the formation of federal-state anti-fraud tasks forces in Mississippi, along with North Carolina and Florida.

An existing case based out of the Northern District of Mississippi was U.S. v. Lakieth Faulkner et al. Faulkner was an attorney and an employee of the SBA. As a part of his actual job, he worked with borrowers to obtain loans. Faulkner was uniquely positioned to understand the Economic Injury Disaster Loan (EIDL) approval process and devised a kickback scheme with co-conspirators to generate more than $11.5 million in fraudulent loan payments by the SBA. Co-conspirators included a former IRS employee.

U.S. Attorney Leary stated, "We have $2.2 billion of PPP loans that took place in the Northern District of Mississippi, an estimated $1 billion of that was fraud. We are blessed to be able to work with our state's Attorney General in putting together a task force because, frankly, we are overwhelmed by this reality and we all need additional assets to combat these crimes. I have been a fed for decades, so when I hear our administration say, 'pin your ears back and go get them,' it is so refreshing. That is what we are going to do."

"President Trump has challenged all of us to step up our efforts to fight fraud and protect American taxpayers from this grift," said Mississippi Attorney General Lynn Fitch. "Partnerships like this one show we are bringing everything to the table in this work. In that spirit, with the support of the U.S. Department of Justice, my office is standing up Joint Task Force Vigilance with our two U.S. Attorneys and the FBI to surge resources and personnel to make Mississippi safer, protect Mississippi taxpayers, and restore law and order. This first-of-its-kind task force will bring the full authority of our offices to bear on con artists, grifters, fraudsters, and scammers."

On April 7, the Department of Justice announced the creation of the National Fraud Enforcement Division ("Fraud Division"). The Fraud Division is laser-focused on investigating and prosecuting those who commit fraud against the American people. The Department's work to combat fraud supports President Trump's Task Force to Eliminate Fraud, a whole-of-government effort chaired by Vice President J.D. Vance to eliminate fraud, waste, and abuse within Federal benefit programs.