Three individuals sentenced for 3.5 million dollar COVID-19 relief fraud scheme


Date: Feb. 6, 2024


Three people were sentenced today for fraudulently obtaining and misusing Paycheck Protection Program (PPP) loans that the U.S. Small Business Administration guaranteed under the Coronavirus Aid, Relief, and Economic Security (CARES) Act in connection with their involvement in a COVID-19 fraud ring.

Khadijah X. Chapman, of Atlanta, was sentenced to three years and 10 months in prison; Daniel C. Labrum, of South Jordan, Utah, was sentenced to two years in prison; and Eric J. O’Neil, of Bethel, Connecticut, was sentenced to two years and three months in prison.

According to court documents and evidence presented at trial, Chapman, Labrum, and O’Neil fraudulently obtained PPP loans for fictitious businesses in 2020 and 2021. The defendants worked with co‑conspirators to falsify information and submitted fraudulent documents to financial institutions in Boise and elsewhere to collectively obtain approximately $3.5 million in relief funding intended for small businesses struggling with the economic impact of COVID-19.

Chapman was convicted in November 2023 of bank fraud. Labrum and O’Neil pleaded guilty in 2023 to bank fraud.

Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division, U.S. Attorney Josh Hurwit for the District of Idaho, Special Agent in Charge Thomas M. Fattorusso of IRS Criminal Investigation (IRS:CI) New York, Assistant Director Michael D. Nordwall of the FBI’s Criminal Investigative Division, Special Agent in Charge Matthew Miraglia of the FBI Buffalo Field Office, Inspector General Gail S. Ennis of the Social Security Administration Office of the Inspector General (SSA-OIG), Special Agent in Charge Sharon B. MacDermott of SSA-OIG, and Inspector in Charge Ketty Larco-Ward of the U.S. Postal Inspection Service (USPIS) Boston Division made the announcement.

IRS:CI, the FBI, SSA-OIG, and USPIS investigated the cases.

Trial Attorneys Jennifer Bilinkas and Tamara Livshiz of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Sean Mazorol for the District of Idaho prosecuted the cases.

On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Justice Department in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The task force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit the Justice Department’s COVID-19 page