Toledo area man sentenced to 94 months in prison for COVID fraud


Date: March 19, 2024


CLEVELAND — Terrence L. Pounds of Holland, Ohio was sentenced to 94 months in prison by U.S. District Judge Pamela Barker after earlier pleading guilty to conspiracy to commit wire fraud, wire fraud and money laundering. He was also ordered to pay $4,239,940.43 to the U.S. Small Business Administration (SBA) and serve 3 years of supervised release.

According to court documents, from March 2020 through December 2020, Pounds and his co-defendants devised a scheme to obtain SBA-financed loans from the Economic Injury Disaster Loans (EIDL) program and the Paycheck Protection Program (PPP) under false pretenses.

Pounds, who was the leader of the conspiracy, arranged for others to provide him with their personal identifying information, which he then used to apply for EIDL loans in their names.

While Pounds listed those individuals as the business owner or applicant in most applications, he repeatedly made the same false statements in numerous applications submitted both for himself and for others. He claimed, for example, that each applicant operated a non-profit organization that was a “Faith-Based Organization” or a “Church” with, among other traits, $1,000,000 in revenue and 15 employees. Based on this false information, the SBA approved many of these loan applications. Pounds often received a share of the loan proceeds as payment for obtaining the loan.

Pounds used some of the money he made from this scheme—from both loans he received directly and payments received from others—to purchase a 2021 Chevrolet Tahoe, a 2021 Kia Telluride, a 2020 Hyundai Elantra and a 2020 BMW X4. Investigators seized those vehicles, and Pounds agreed to forfeit them.

Pounds submitted dozens of fraudulent EIDL loan applications collectively seeking more than $9.5 million in EIDL funds, with each application generally seeking approximately $150,000. The SBA approved and paid approximately $3.7 million in EIDL loans based on those

applications. Pounds and his co-conspirators also submitted numerous fraudulent PPP loan applications, many of which were approved, raising the total of funds obtained by fraud to more than $4.2 million.

This investigation was conducted by the IRS Criminal Investigation (CI) and the Cleveland FBI – Canton Resident Agency. This case is being prosecuted by Assistant U.S. Attorneys Elliot Morrison and Edward Brydle.

CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a more than a 90 percent federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad.