By Camm Ashford
The long arm of the law finally caught up with two East Tennessee residents accused of participating in what prosecutors are calling the “largest fraud in U.S. history.”
Arrests of Antonio Dewayne Menifee of Chattanooga and Leslie Danielle Bethea of Surgionsville are the result of what the Justice Department is regarding as an “epic swindle” of Paycheck Protection Program (PPP) funds.
In the wake of the economic and social disruption caused by the coronavirus, Congress on April 3, 2020 initially set aside $349 billion to be administered by the Small Business Administration (SBA)–in the form of the PPP–to help small business owners continue paying their employees during the pandemic.
The program authorized banks and other financial institutions to make government-backed loans to businesses, loans that were to be forgiven if the companies spent the money on business expenses.
Perhaps the largest and most significant federal emergency aid bill in U.S. history, an NBC News investigation last year reported that as much as $80 billion of the total $800 billion eventually authorized under the PPP was doled out to fraudsters in the U.S. and abroad and used to pay for luxury cars, mansions, pricey vacations, drugs and plastic surgery.
Federal officials acknowledge that the PPP program in 2020 sacrificed security for speed. And experts say millions of borrowers inflated their numbers of employees or just created companies out of thin air.
Menifee, a 45-year-old convicted drug dealer, is accused of submitting fake forms in April 2021 to defraud the SBA into granting him a PPP loan for a nonexistent construction firm.
Bethea, 40, is accused of conning the SBA into awarding her a PPP loan for a fake business and using the money to get plastic surgery in Florida and spending a week recovering at the Trump International Beach Resort. She was already on probation in a federal fraud case.
Federal and state law enforcement officers in September 2021 sought to execute a search at 8209 Blue Spruce Dr., the residence of Menifee and his girlfriend, as part of an investigation into the $11,485 PPP loan Menifee received. They discovered and seized cocaine, a Glock 9mm later identified as stolen, ammunition, plastic baggies used to package drugs, digital scales used to weigh drugs and $15,000 in drug money, FBI Agent Coley Vincent Warner wrote in a criminal complaint.
Menifee was convicted in 2002 in U.S. District Court in Chattanooga of conspiracy to sell cocaine and guns. He served roughly a decade behind bars before he was released but later wound up repeatedly violating the terms of his probation by using drugs, lying to authorities and threatening violence against his wife, records show.
Menifee was ordered back to prison in 2017 as a result of those violations and served another 27 months. It’s not clear from the court record whether he was still on federal probation when he sought and won the PPP loan in 2021.
According to the U.S. District Court indictment, Bethea filed fake tax documents with the SBA in March 2021 to secure a PPP loan for $20,805. She has been charged with wire fraud and money laundering.
“On the electronic application … Leslie Bethea fraudulently stated that she was a sole proprietor of a marketing consulting services business that grossed $99,865 a year when, in truth and fact as she well knew, Leslie Bethea had no business that grossed that sum,” U.S. Secret Service Senior Special Agent Thomas Whitehead wrote in a criminal complaint.
Bethea was on federal probation for identity theft and for creating fake credit cards when she conned the SBA. Whitehead said in the complaint that Bethea was awarded the PPP loan without question and deposited the loan proceeds into her Knoxville bank account. She then used that money to travel to Aventura, Fla., in April 2021.
While in Aventura, Bethea “received elective cosmetic surgery services totaling $5,500” from Dolls Plastic Surgery over a three-day period, Whitehead’s complaint stated. The agent did not disclose details of that surgery in the complaint.
Bethea spent five days at the Trump International Beach Resort, a luxury hotel in Sunny Isles, Fla., while recovering from the surgery, using the Covid relief plan loan to pay the $2,834 tab, the agent wrote.
Both Bethea and Menifee are now behind bars awaiting further court action in their respective cases.