Jacksonville resident Jared Dean Eakes pleaded guilty to bank fraud and wire fraud, federal prosecutors announced Sept. 29.
Eakes, 34, faces a maximum penalty of 50 years in prison, said a Sept. 29 news release from the U.S. Attorneys Office, Middle District of Florida. A sentencing date has not yet been set.
According to a plea agreement, Eakes, 34, portrayed himself as a legitimate adviser and contacted investment advisers who were looking to sell their advisory businesses.
After negotiating to take over management of the advisers’ client assets, between approximately January 2019 and February 2020, Eakes converted $2,737,462 of victim-investor funds to his own benefit by withdrawing the funds in cash, using them to pay personal expenses and transferring them to a Las Vegas-based casino company, and by engaging in unauthorized options trading in a personal brokerage account.
In addition, between March 2020 and November 2021, Eakes fraudulently secured $4,752,270 in emergency funds through four federal Paycheck Protection Program loans.
The Coronavirus Aid, Relief and Economic Security (CARES) Act was a federal law enacted March 2020. It was designed to provide emergency financial assistance to Americans who were suffering the economic effects resulting from the COVID-19 pandemic.
One source of relief provided by the CARES Act was the authorization of up to $349 billion in potentially forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April 2020, Congress authorized more than $300 billion in additional PPP funding.
The PPP allowed qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1%. Businesses were required to use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities. The PPP allowed the interest and principal to be forgiven if the business spent the proceeds on those expenses within a set time period and used at least a certain percentage of the loan toward qualifying business expenses.
According to the plea agreement, Eakes caused the submission of four PPP loan applications, including applications for two of the entities involved in the scheme to defraud investors, which contained false and fraudulent supporting documentation and statements regarding the entities’ employees and payroll.
After he obtained the emergency loans, Eakes did not use the funds for qualifying expenses. Instead, he used the funds to engage in options trading or withdrew them in cash.
Eakes has agreed to forfeit $2,737,462.20, the proceeds of the scheme to defraud investors, and $4,752,270, the proceeds of the PPP loan fraud scheme. He also agreed to make full restitution to the victims of his offense.
The case was investigated by the FBI and the Federal Housing Finance Agency – Office of Inspector General. It is being prosecuted by Assistant U.S. Attorney David Mesrobian.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.