- A felon convicted in North Carolina for scamming the federal government out of $143,000 in COVID-19 relief will get a new prison sentence.
- An unsigned opinion from the 4th U.S. Circuit Court of Appeals shows that Byron Jones secured federal COVID business relief less than a year after finishing a 13-year prison sentence.
The 4th U.S. Circuit Court of Appeals has ordered a new prison sentence for a felon convicted of scamming the federal government out of $143,000 in COVID-19 relief funds.
Appellate judges agreed that the trial judge in Byron Jones’ case made an error in setting the conditions for his eventual release from prison.
“Byron Jones was on supervised release when he paid a purported financial advisor to file an application for a COVID-19 relief loan on behalf of his newly established business,” according to the unsigned opinion released Wednesday. “The application contained multiple false statements, including inaccurate representations of the business’ revenues and Jones’ criminal history.”
“After the application was approved, Jones received $143,000 in relief funds from the Government,” the opinion continued. “When the application’s falsities were discovered, the Government filed a petition to revoke Jones’ supervised release, asserting that Jones committed three violations of law in connection with the application. In his defense, Jones asserted that the financial advisor filed his application and included the false statements without his knowledge.”
“The district court rejected Jones’ argument and found that the Government proved that Jones committed the alleged violations by the required preponderance of the evidence. The court then sentenced Jones to twenty-four months’ imprisonment and five years’ supervised
release but failed to orally pronounce his discretionary conditions of release.”
After conviction on “multiple” offenses in 1996, Jones spent 13 years in prison. He started supervised release in November 2019.
In April 2020 he incorporated a trucking business, Ramses Air Freight and Transport, in Delaware. By June the business had filed an application with the U.S Small Business Administration for COVID relief. The federal government provided an initial $10,000 to RAFT that month and followed up with another $133,000 within weeks of the initial payment.
Financial information Jones shared with his probation officer raised red flags about the federal COVID relief. Further investigation uncovered false statements in Jones’ grant application, appellate judges wrote.
“The following false information about RAFT was included in the Rapid Intake Form: (1) RAFT was incorporated in 1999; (2) it had $286,000 in gross revenues in the twelve months preceding January 31, 2020; and (3) it had non-profit/agriculture costs of operation of $138,389 in the twelve months preceding January 31, 2020. The Rapid Intake Form also falsely stated that the business owner had not been placed on parole or probation in the past five years. Lastly, the Rapid Intake Form indicated that it was not prepared by a third party and that no payments were made to a third party for application preparation services,” according to the 4th Circuit opinion.
Jones admitted paying $13,000 to “Shay Chambers, someone purporting to be a financial advisor and certified public accountant (CPA) in Ohio,” to help with the application and other financial services. Jones blamed Chambers for the false information provided to the feds.
The federal government charged Jones with wire fraud, false statements, and transactional money laundering. The feds also sought to revoke Jones’ supervised release.
Prosecutors countered Jones’ attempts to shift blame to Chambers. “[T]he Government provided evidence that it argued proved that Jones knew about and participated in the fraud,” 4th Circuit judges wrote. “For example, in addition to the evidence recited above, the Government presented Jones’ bank statements, which showed that in the three months following receipt of the loan, Jones transferred more than $19,000 of the loan into his personal account, which he categorized as CEO salary payments.”
In January 2020, U.S. District Judge Robert Conrad in North Carolina’s Western District held a revocation hearing. He agreed with the federal government. Conrad sentenced Jones to two years in prison with five additional years of supervised release.
“The district court did not orally pronounce any specific conditions of supervised release, but a later written judgment included four mandatory and nineteen discretionary conditions,” according to the 4th Circuit opinion.
Appellate judges rejected Jones’ attempt to reverse revocation of his supervised release. “[T]here is ample evidence that Jones provided false information to Chambers and did not simply rely on her advice as an alleged expert,” according to the opinion. “Most obviously,
Jones admitted that he provided the $286,000 revenue figure to Chambers.”
“Although he contends that he believed that the pertinent application question asked for future projections, even if that’s true, that figure has no support,” judges explained. “Jones offered no basis to believe that he would make $286,000 in the next year, especially considering that he had recently been released from prison and had just incorporated the business. That figure alone was a false statement that Jones used to obtain the loan and sufficiently supported the alleged violations.”
That’s not the end of the case. “Nonetheless, we agree with Jones — as does the Government — that the district court erroneously failed to orally pronounce Jones’ discretionary conditions of release at the revocation hearing,” 4th Circuit judges wrote.
The case heads back to a trial court for a new sentencing hearing.
Appellate Judges Steven Agee and James Wynn and U.S. District Judge Henry Hudson of Virginia agreed to the unanimous ruling.