Detroit man sentenced to 2 years for $590,000 PPP loan money laundering scheme

A Detroit man was sentenced to two years in prison for a $590,000 Paycheck Protection Program bank fraud and money laundering scheme, federal authorities said.

Darrell Baker, 56, pleaded guilty in September 2020 to one count of bank fraud and one count of money laundering.

Authorities said Baker defrauded a Pennsylvania financial institution in the issuance of a PPP loan, which was designed to help businesses pay their employees during the COVID-19 pandemic.

"Mr. Baker treated the PPP like his own personal bank account," said Acting US Attorney Mohsin.  "This defendant’s actions caused the diversion of essential funds earmarked for legitimate businesses suffering due to the COVID-19 pandemic for his own personal gain."

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In his plea agreement, Baker said he applied for and obtained a $590,000 PPP loan on behalf of a purported business that he owns, called "Motorcity Solar Energy, Inc."

According to authorities, Baker submitted paperwork with his loan application that said his company had 68 employees and paid wages, tips, and other compensation
totaling $2.8 million in 2019. This was false.

Baker withdrew approximately $172,000 of the $590,000 loan he obtained before his own financial institution froze the remainder, which was returned to Customer’s Bank. 

Baker used the funds he did obtain to purchase four cashier’s checks, and used the four checks to purchase two Cadillac Escalades, a Dodge Charger, and a Hummer. 

He was ordered to forfeit these vehicles. Baker was also ordered to pay a money judgment of $172,484.40, as well as $89,864 in restitution. 

"By illegally taking money from the Paycheck Protection Program, Mr. Baker harmed the owners and employees of small businesses struggling through the pandemic," said Timothy Waters, Special Agent in Charge of the FBI in Detroit.