A federal grand jury has returned an indictment for the former CEO of Strong City Baltimore.
Reginald Davis, 40, is charged with wire fraud and money laundering in relation to the submission of fraudulent COVID-19 CARES Act loan applications.
According to the Department of Justice, Davis allegedly stole over one million in taxpayer dollars that were intended to assist those suffering from the effects of the pandemic.
Assistance from the CARES Act included forgivable loans to small businesses for job retention and other expenses through the Paycheck Protection Program, or the the PPP loan program.
Strong City Baltimore entered into an agreement with five other non-profits to deposit their funds into a set of restricted funding sources.
But according to the indictment, those client assets were used to fund operations for Strong City Baltimore.
From January 2021 to March 2021, Davis allegedly submitted six PPP loan applications on behalf of the SCB in order to cover for the money owed to the other non-profits.
In total, over $1.4 million was dispersed into the accounts from the PPP loan in which Davis used over $625,000 of those funds to close multiple agreements.
Neither Davis nor any other SCB employee informed their former non-profit clients that the funds they received were the proceeds of a PPP loan, or that there were any restrictions on the use of funds.
If convicted, Davis faces a maximum sentence of 20 years in federal prison for wire fraud and a maximum of 10 years in federal prison for each of two counts of money laundering.
