A Zebulon woman was sentenced Thursday to eight years in prison for her role in a multi-million-dollar COVID-19 fraud scheme, the U.S. Department of Justice (DOJ) announced Friday.
Loretta Clarice James, 49, pleaded guilty to conspiracy to commit wire fraud on May 29, 2024. Her co-conspirator, Lakesha Bowles, 43, received a 30-month prison sentence on April 24 for her involvement in the same scheme.
Both women must repay over $1 million in restitution for crimes affecting hundreds of victims.
“This investigation began following several complaints from Wake County residents regarding identity theft and fraud,” said Wake County Sheriff Willie Rowe. “Over the course of nearly a year, a thorough investigation led to multiple arrests, supported by the NCDMV License and Theft, Clayton Police Department, U.S. Department of Homeland Security, and the IRS Criminal Investigations. The investigators involved demonstrated exceptional diligence in pursuing the suspects and uncovering a vast network of crimes. Their efforts resulted in identifying hundreds of victims, not only in Wake County, but across North Carolina, and uncovering hundreds of thousands of dollars in fraud. I would like to commend the investigators for their tireless work and unwavering commitment to serving the residents of our county and state.”
Court records revealed that James and Bowles submitted fraudulent loan applications to the Paycheck Protection Program (PPP), which Congress created to support small businesses during the pandemic’s economic fallout.
The DOJ said James inflated payroll figures and filed applications for inactive or non-existent businesses. She and Bowles also filed applications for others they recruited, collecting a portion of the funds when the loans were approved.
James also targeted the Economic Injury Disaster Loan (EIDL) Program and the Restaurant Revitalization Fund (RRF) Program. She submitted hundreds of fake EIDL applications, claiming businesses and employees that didn’t exist, and received over $500,000 through these false claims.
Altogether, James, Bowles, and their co-conspirators obtained more than $1.5 million in COVID-19 relief funds. Darnell William King of Clayton, who also worked with the two women, pleaded guilty to PPP fraud and identity theft on March 11.
“The defendants conspired to take advantage of critical aid programs intended to provide relief for businesses affected during the pandemic by fraudulently applying for and obtaining COVID-19 program funds,” said Special Agent in Charge Donald “Trey” Eakins, Charlotte Field Office, IRS Criminal Investigation. “(We) will continue to work alongside our law enforcement partners to pursue individuals who try to exploit federal relief programs for their personal gain.”
The DOJ revealed that James didn’t stop there. She also played a central role in an identity theft ring that used stolen identities to apply for loans and personal lines of credit.
Her tasks included obtaining Social Security numbers of individuals with strong credit, submitting loan applications in their names, and forging supporting documents and emails.
James and others then used “mules” to collect the cash from lenders. They repeated this scheme with loans ranging from $5,000 to $10,000—none of which were ever repaid.
“This office is committed to holding accountable those who exploited a national crisis and the hardships of others for their personal gain and greed,” said Acting U.S. Attorney Daniel P. Bubar. “Public relief funds were created to support hardworking individuals and small businesses during times of crisis—not to line the pockets of criminals. We will continue to work diligently with our many state and federal partners to pursue justice for those who choose to abuse public trust by lying, cheating, and stealing resources that are meant to support our community in its greatest time of need.”
