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Detroit man pleads guilty to defrauding $590,000 loan from Payroll Protection Program

Bail out fraud graphic.
Bail out fraud graphic.(MGN)
Published: Sep. 11, 2020 at 1:36 PM EDT
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DETROIT, Mich. (WJRT) - A Detroit man pleaded guilty to obtaining a fraudulent $590,000 loan from the Payroll Protection Program and using part of the proceeds to buy himself four new vehicles.

U.S. Attorney Matthew Schneider said 56-year-old Darrell Baker pleaded guilty in U.S. District Court to fraud and money laundering charges for obtaining the fraudulent loan for Motorcity Solar Energy Inc.

Baker claimed in loan documents that the company had 68 employees and paid $2.8 million in wages last year, so he applied for obtained the $590,000 from a Pennsylvania bank through the Payroll Protection Program in the federal CARES Act.

The loan would be forgiven if Baker followed kept employees on the job and met other terms.

However, Schneider said Motorcity Solar actually has no employees and paid nothing in wages last year.

Baker was able to withdraw $172,000 of the loan in the form of four cashier’s checks, which he used to purchase two Cadillac Escalades, a Hummer and a Dodge Charger. His bank froze the remainder of the $590,000 after those transactions, Schneider said.

“My office and our law enforcement partners have no tolerance for frauds affecting programs designed to help our economy survive the COVID-19 pandemic," he said. "We will prosecute such cases aggressively, and today’s guilty plea is an example of our commitment to holding accountable anyone fraudulently obtaining pandemic relief funds to line their own pockets.”

Under a plea agreement, Baker is required to forfeit the four vehicles to the federal government and repay more than $172,000. He is scheduled for sentencing on Jan. 14.

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