Former Philadelphia Eagles NFL running back, Wendell Smallwood Jr., who hails from the Wilmington area, is facing charges of fraud related to COVID-19 relief programs, as per court documents.
According to federal prosecutors, Smallwood is accused of submitting false information to government agencies in order to receive payments linked to his businesses. They further allege that he was involved in a kickback scheme with others to defraud COVID-19 relief funds and that he provided false information to tax authorities. These claims were made in a criminal complaint filed by prosecutors in the District of Delaware.
The defendant, Smallwood, is facing three serious charges: wire fraud, conspiracy to commit wire fraud, and conspiracy to defraud the Internal Revenue Service. If convicted, these charges could potentially result in a maximum prison sentence of 50 years. However, it’s worth noting that individuals without prior criminal convictions, like Smallwood, typically receive less severe punishments if found guilty.
Smallwood has not yet been arraigned and has not entered a plea in the case. A hearing for that is set to take place in December.
Mark B. Sheppard, an attorney from the Philadelphia area representing Smallwood, stated that Wendell has fully cooperated with the investigation. Sheppard added that they will provide further information when they appear in December.
The case was initiated by prosecutors led by David Weiss, the U.S. Attorney for the District of Delaware. When asked for comment on the case, Kim Reeves, a spokesperson for Weiss, declined to provide any information.
Smallwood’s football career began at Red Lion Christian Academy in Bear, where he played high school football. He was subsequently drafted by the Philadelphia Eagles in 2016 and went on to have a successful five-year tenure in the league, playing for three different teams until 2020.
What the feds claim in the charging documents
This Article Includes
Throughout the turbulent year of 2020, as the COVID-19 pandemic wreaked havoc, the federal government took decisive action by approving numerous relief programs. These programs aimed to distribute trillions of dollars in order to provide much-needed support to small businesses and households. The goal was to help them withstand the economic shutdown that was a direct result of the health crisis.
The Economic Injury Disaster Loan program was designed to provide small businesses with low-interest loans to help them cover specific expenses.
According to federal prosecutors, Smallwood allegedly applied to the program by using businesses that were either no longer in operation or had been newly registered. They also allege that Smallwood provided false information about the businesses’ activities during the period from May 2020 to June 2021.
According to prosecutors, he allegedly obtained $46,000 in loan proceeds through a program they consider to be fraudulent. The complaint reveals that the funds were not utilized for business expenses and were instead withdrawn as cash from ATMs in Delaware and nearby states.
According to prosecutors, he is also accused of providing inaccurate information to the Paycheck Protection Program, which was a COVID-era relief initiative designed to provide forgivable loans for business expenses such as payroll, rent, and utilities. This program benefited both small businesses and sole proprietors.
According to the criminal complaint, Smallwood collaborated with an unidentified individual to submit fraudulent applications on behalf of 13 sole proprietors. The applications contained false information about the businesses, either claiming their existence or exaggerating their operations. As a result of these deceitful actions, they were able to generate $269,000 in proceeds.
According to prosecutors, Smallwood and his accomplice orchestrated kickbacks from the sole proprietors who were receiving the loan proceeds. It is alleged that Smallwood personally received kickback payments ranging from $4,000 to $12,000.
Prosecutors have accused him of being involved in a tax fraud conspiracy. They claim that he recruited tax filers from Delaware and other places and prepared fraudulent tax documents that contained false information about income. The IRS issued approximately $110,000 in tax refunds based on these deceitful applications, according to prosecutors.
The prosecutors signed the criminal complaint against Smallwood on October 28th. It is uncertain when it was unsealed and made accessible on the court’s public docket.
One of thousands of COVID fraud cases
Smallwood’s case is not the only one of its kind and is relatively insignificant compared to the magnitude of other fraud allegations related to COVID-19.
Federal prosecutors have charged individuals involved in COVID-19 fraud, ranging from unsophisticated con artists to highly organized groups consisting of dozens of individuals. Among those targeted are doctors, medical manufacturers, a reality television star, and even an individual who sought to obtain a pricey Pokémon card.
A former University of Delaware student locally faced accusations of fraudulently obtaining approximately $1.4 million in COVID-19 loans for fictitious businesses.
According to a report by the Justice Department’s COVID-19 Enforcement Task Force in April, federal authorities have charged over 3,500 individuals with federal crimes related to COVID-19 fraud. Additionally, they have successfully recovered more than $1.4 billion in stolen pandemic funds and have resolved over 400 civil settlements and judgments.
In June 2023, the Small Business Administration’s Office of the Inspector General, the agency responsible for administering the programs in Smallwood’s case, estimated that over $200 billion in potentially fraudulent loans and advances were disbursed across several COVID-era programs.
According to the report, approximately 17% of the $1.2 trillion that was distributed from the two programs linked to Smallwood’s case went to individuals who could potentially be involved in fraudulent activities.
You can reach out to Xerxes Wilson at (302) 324-2787 or via email at xwilson@delawareonline.com.
The criminal complaint filed by Xerxes Wilson on Scribd.
