Jefferson County man sentenced for COVID-Relief fraud

BEAUMONT, Texas - A Beaumont man has been sentenced for federal violations related to a COVID-relief fraud scheme in the Eastern District of Texas, announced U.S. Attorney Damien M. Diggs.

Acheon King Aleidron, formerly known as Cameron Alexander, 35, pleaded guilty to conspiracy to commit wire fraud and was sentenced to 57 months in federal prison by U.S. District Judge Marcia A. Crone on July 1, 2024. Aleidron was also ordered to pay $415,900.00 in restitution.

According to court documents, Aleidron used a Beaumont address for a business named The Fishing Factor, LLC to fraudulently obtain $415,000 under the Disaster Relief and Emergency Assistance Act for COVID-19 pandemic relief. Aleidron filed numerous fraudulent loan applications and received the funds which were intended to cover payroll, fixed debts, utilities, rent/mortgage, accounts payable and other bills incurred by qualifying businesses during and resulting from the COVID-19 pandemic. Aleidron opened five bank accounts with four different banks in in order to receive funds from the scheme. The government was able to seize $186,413.78 from Aleidron's various bank accounts, which will be forfeited to pay back a portion of the loss.

The CARES Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses. In April 2020, Congress authorized over $300 billion in additional funding.

The Economic Injury Disaster Loan Program ("EIDL") was a COVID-19 pandemic relief program administered by the SBA that provided loans to small businesses for job retention and certain other expenses. EIDL loans were intended to cover payroll, fixed debts, utilities, rent/mortgage, accounts payable and other bills incurred by qualifying businesses during, and resulting from, the COVID-19 pandemic. EIDL loans are processed outside the State of Texas. According to the SBA website (www.sba.gov), the stated purpose of an EIDL loan is "[t]o meet financial obligations and operating expenses that could have been met had the disaster not occurred." EIDL loans are low interest loans and are not forgivable.

To obtain an EIDL loan, a qualifying business had to submit an EIDL loan application, which was signed by an authorized representative of the business. The EIDL loan application required the business (through its authorized representative) to acknowledge the program rules and make certain affirmative certifications to be eligible to obtain the EIDL loan, including that the business was in operation and needed the funds for working capital to alleviate economic injury caused by disaster occurring in the month of January 31, 2020, and continuing thereafter. For a business to be eligible for an EIDL loan, the business must have been in operation before February 1, 2020.

EIDL applications were submitted directly to the SBA and processed by the agency with support from a government contractor, Rapid Finance. EIDL loan applications were received by SBA servers located in Virginia, Iowa, or Washington. Once approved, the individual or business received the EIDL loan proceeds via an electronic funds transfer to a financial account under the control of the business.

The amount of the loan, if the application were approved, was determined based on the information provided by the applicant about employment, revenue, and cost of goods, as described above. Any funds issued under an EIDL advance were issued directly by the SBA. EIDL funds could be used for payroll expenses, sick leave, production costs, and business obligations, such as debts, rent, and mortgage payments.

This case was investigated by the SBA Office of Inspector General and prosecuted by Assistant U.S. Attorney Reynaldo P. Morin.

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