Three people with Tallahatchie County ties face an April 8 trial date to answer a federal indictment alleging their roles in a scheme to fraudulently obtain government pandemic relief funds.
Zipora Hudson, 47, CEO and founder of Zippy Bee LLC, doing business as Zippy Bee’s Tax Service in Charleston, is charged with three counts of wire fraud, one count of conspiracy to commit wire fraud, two counts of money laundering and one count of conspiracy to commit money laundering, all felony charges.
Hudson’s son, Montreal Hudson, 30, is charged with two counts of wire fraud and one count each of conspiracy to commit wire fraud, money laundering and conspiracy to commit money laundering.
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Deandre Jones, 31, is charged with one count each of wire fraud, conspiracy to commit wire fraud, money laundering and conspiracy to commit money laundering.
If convicted, the defendants face a maximum penalty of 30 years imprisonment for the conspiracy and wire fraud charges and 20 years for the money laundering violations.
According to a court scheduling order, each of the three defendants has entered a plea of not guilty on all charges.
The trial is set before U.S. District Judge Michael P. Mills at 9:40 a.m. on April 8 at the federal courthouse in Oxford. Any plea agreements must be submitted by March 25.
A Feb. 13 news release from the U.S. Department of Justice identifies the trio as DeSoto County residents of Olive Branch.
They were named in a Jan. 25 indictment returned by a federal grand jury in U.S. District Court for the Northern District of Mississippi.
Court documents show that Jones was arrested on Feb. 7 while both Zipora Hudson and Montreal Hudson were arrested on Feb. 13. Each was released after posting a secured appearance bond of $10,000.
The defendants allegedly devised a scheme to defraud financial institutions in order to obtain funds authorized under the federal coronavirus relief bill’s Paycheck Protection Plan, which provided forgivable loans to small businesses for job retention and certain other expenses.
The PPP permitted participating third-party lenders to approve and disburse Small Business Administration (SBA) backed PPP loans to cover payroll, fixed debts, utilities, rent/mortgage, accounts payable, costs related to the continuation of group health care benefits and other bills incurred by qualifying businesses during, and resulting from, the COVID-19 pandemic. Loans were fully guaranteed by the SBA.
To obtain a PPP loan, a business had to submit a PPP loan application, certify that the business was in operation and either had employees for whom it paid salaries and payroll taxes or paid independent contractors. A business also had to provide documentation showing payroll expenses, such as filed federal income tax documents.
Once approved, PPP loan proceeds were received through an electronic funds transfer from the third-party lender to a financial account under the control of the business.
The indictment alleges that beginning in January 2021 and continuing through August 2021, the defendants caused “materially false and fraudulent” PPP loan applications to be filed with PPP lenders, who transmitted approved loan funds via interstate wire communications into bank accounts of the borrowers.
The indictment cites the cases of 13 unnamed borrowers, most of them identified as customers of Zippy Bee’s income tax preparation services, who allegedly were told by the defendants that they qualified for a PPP loan and were offered the defendants' assistance in applying for the loan.
The defendants allegedly “falsified and fabricated supporting documentation required for PPP loan applications,” including, the indictment notes, “lying about ... the existence and operation of businesses and business income.”
The indictment lists nearly two-dozen “fraudulently obtained” loan payments, totaling $491,893. A number of the 13 borrowers allegedly had PPP loan applications submitted to two different lending institutions and received PPP loans from both.
For their services, the indictment charges that the borrowers paid a portion of the PPP funds they received to the defendants, those fees ranging from $2,000 to $5,000 per loan.
The court document suggests there was even more alleged fraud than that listed in the indictment.
"The defendants assisted numerous borrowers, including and not limited to those identified in this indictment, in submitting false and fraudulent PPP loan applications."
The alleged scheme was initially uncovered during the course of a civil investigation, the news release noted.
The case was investigated by the Internal Revenue Service Criminal Investigation Division and is being prosecuted by the U.S. Attorney’s Office for the Northern District of Mississippi.
Editor’s note: An indictment is merely an allegation and is not evidence of guilt. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
