SC postal workers accused in COVID relief fraud that cost millions, US Attorney says

Three postal workers, including two sisters from South Carolina, have been charged by federal prosecutors for their alleged roles in a scam that netted as much as $8 million from the federal Paycheck Protection Program.

In a recently unsealed indictment, federal prosecutors in South Carolina allege that Tiffany McFadden of New York and Keisha Lewis and Cherry Lewis of South Carolina filed false applications for themselves and others. The women face six charges of wire fraud and conspiracy.

The “national scheme” netted the three defendants $1 million directly, but that number may be as high as $8 million, according to a statement released by the U.S. Attorney’s Office for South Carolina.

“PPP loans were intended to help businesses survive unprecedented challenges. Every dollar stolen from this program was stolen from taxpayers and legitimate businesses in need of support,” said U.S. Attorney Adair F. Boroughs of South Carolina.

McFadden, 40, a former U.S. Postal Service employee who regularly traveled to South Carolina, is accused of being the mastermind behind the scheme. She allegedly filed fraudulent PPP loans on behalf of other individuals, using “routinely fictitious” businesses, according to the indictment. McFadden allegedly took a cut of the fraudulently obtained loans.

“Most PPP applicants were also aware that the information submitted to the SBA was false,” according to the indictment.

The indictment describes PPP loans submitted in the names of Cherry and Keisha Lewis.

On March 4, 2021, the indictment states that a bank account belonging to Keisha Lewis, 33, from Hemingway, S.C., received $20,500 from PPP lender Itria Ventures. The next day she allegedly transferred $4,000 to Tiffany McFadden’s CashApp account.

The indictment also said that a PPP loan was submitted in the name of Cherry Lewis, 43, from Johnsonville, SC. On Feb. 10, 2021 she submitted an application for a fraudulent PPP loan, according to the indictment. Cherry Lewis is accused of “overstating her income and claiming ownership of non-existent businesses.”

The indictment also accused Cherry Lewis and Keisha Lewis of requesting blank, fillable tax forms from McFadden that they then provided to other individuals “to use in assisting others to complete PPP applications.”

If convicted, the defendants face up to 20 years in prison. They may also be required to pay fines and restitution.

PPP was designed to provide relief to business owners who were unable to pay workers due to COVID-19 shutdowns. The forgivable loans were administered by the U.S. Small Business Administration and were intended to encourage business owners to keep employees.

The defendants were arrested by the U.S. Secret Service on Jan. 6, 2023, according to the statement. They were arraigned the same day before U.S. Magistrate Judge Kaymani D. West at the federal courthouse in Florence, S.C. They have been released on bond pending trial.

“Any member of the public who has information related to this scheme is encouraged to contact the U.S. Secret Service,” said Burroughs.

The case was investigated by the U.S. Secret Service, with assistance from the U.S. Postal Inspection Service, the Small Business Administration, the Florence County Sheriff’s Office, and the Williamsburg County Sheriff’s Office, according to the statement.

Assistant U.S. Attorneys Elliott B. Daniels and Winston Marosek, who also serves as the Office’s Coronavirus Fraud Coordinator, are prosecuting the case.