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Date: 05-06-2022
Case Style:
Case Number: 1:21-cr-00805-PAB
Judge:
Court: United States District Court for the Northern District of Ohio (Cuyahoga County)
Plaintiff's Attorney: United States Attorney’s Office
Defendant's Attorney: David Magilligan
Description: Cleveland, Ohio criminal defense lawyers represented defendants charged with conspiracy to commit wire fraud.
Phillip J. Augustin, age 56, and James Stote, age 56, obtained a fraudulent PPP loan for Augustin’s company, Clear Vision Music Group LLC, using falsified documents. After submitting that application, Stote and Augustin immediately began trying to illicitly obtain larger PPP loans for themselves and their associates. Stote and Augustin recruited additional PPP loan applicants and prepared and submitted fraudulent loan applications for them in exchange for a share of the loan proceeds. Augustin used his network of business contacts as a manager for professional football players to recruit loan applicants. The applications they submitted for these loans relied on fake payroll numbers, falsified IRS forms, and phony bank statements. Stote submitted or facilitated at least 79 fraudulent loan applications worth at least $35 million. Among those loans, Augustin was also held responsible for at least 34 fraudulent loan applications worth at least $15 million.
The scheme included at least two loans to entities in Northeast Ohio that fraudulently obtained approximately $875,000.
In addition to their prison sentences, Stote was ordered to serve three years of supervised released and pay $10,149,752.69 in restitution and forfeit $1,137,715.13 in U.S. currency, four Rolex watches and other jewelry items valued at more than $31,000.
Augustin was ordered to serve three years of supervised released and pay $5,910,277.72 in restitution and forfeit $280,269.35 in U.S. currency.
In total, 25 people have been charged for their participation in this scheme in the Northern District of Ohio, Southern District of Florida, and Middle District of North Carolina.
Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division; Acting U.S. Attorney Michelle M. Baeppler for the Northern District of Ohio; Special Agent in Charge Bryant Jackson of the IRS-Criminal Investigation (IRS-CI) Cincinnati Field Office; Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division; Interim Special Agent in Charge Philip E Frigm, Jr. of the FBI’s Cleveland Field Office; and Special Agent in Charge Sharon Johnson of the SBA’s Office of Inspector General (SBA-OIG) Central Region made the announcement.
The IRS-CI, FBI, and SBA-OIG are investigating the cases.
This case was prosecuted by Assistant U.S. Attorney Elliot Morrison for the Northern District of Ohio and Trial Attorney Philip Trout of the Criminal Division’s Fraud Section.
Outcome: Stote was sentenced to ten years in prison and Augustin to six and a half years.
Plaintiff's Experts:
Defendant's Experts:
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