When the 32-year-old CEO of a social justice nonprofit got turned down for an Economic Injury Disaster Loan during the COVID-19 pandemic, prosecutors said, he turned his attention to another federal program designed to help struggling small businesses get by.
Now he is accused of duping the lender that offered him nearly $306,000 in forgivable loans.
Brandon Fitzgerald-Holley, of Suitland, Maryland, pleaded guilty on Friday, Dec. 3 to wire fraud charges related to an alleged scheme to defraud the federal Paycheck Protection Program by lying on his loan application.
Fitzgerald-Holley heads the Coalition for Social Justice and Reform, a nonprofit registered in Virginia that appears to exist in name only, prosecutors said. According to his LinkedIn page, Fitzgerald-Holley has been the CEO and president since 2018.
Fitzgerald-Holley could not be reached for comment, and a public defender representing him did not immediately respond to McClatchy News’ request for comment on Monday, Dec. 6.
Prosecutors said Fitzgerald-Holley founded the Coalition for Social Justice and Reform in 2018, which has remained “largely non-operational” with no reported operations, income, employees or payroll expenses. Documents filed with the State Corporation Commission in Virginia show Fitzgerald-Holley filed his last annual report for the nonprofit on March 31, 2020 — the same day he submitted an application for a $150,000 Economic Injury Disaster Loan, or EIDL.
Small businesses facing upheaval during the coronavirus pandemic could apply for an EIDL and receive advances of up to $10,000 that did not have to be repaid, the government said.
The Small Business Administration doled out about 3.8 million of those low-interest loans between March 2020 and February 2021, according to a report issued by the Government Accountability Office. Combined with 5.8 million advances, the government spent about $224 billion on the EIDL program.
In his application for an EIDIL, Fitzgerald-Holley claimed the Coalition for Social Justice and Reform had 25 employees with $546,000 in gross revenue and $500,000 in costs, prosecutors said. He also listed his own personal bank account at the Navy Federal Credit Union.
The application was denied on June 3, the government said, and Fitzgerald-Holley asked the Small Business Administration to reconsider 10 days later.
This time, however, he provided a different bank account — newly opened at JPMorgan in the nonprofit’s name. But, prosecutors said, the government denied the request.
Then, Fitzgerald-Holley turned to the Paycheck Protection Program, which provided struggling small businesses with forgivable loans to cover payroll costs, mortgage interest, rent and utilities during the pandemic. The government has distributed more than 11 million PPP loans totaling $791 billion as of Dec. 5, according to the Small Business Administration.
Fitzgerald-Holley submitted an application for a PPP loan through a fin tech company on June 13, 2020, according to court documents. He said the Coalition for Social Justice and Reform had 25 employees and average monthly payroll costs of $122,342 — false claims he is accused of bolstering with made-up tax forms.
This time, prosecutors said, the application was approved, and Fitzgerald-Holley received a PPP loan for $305,854 on June 16, 2020.
According to his plea agreement, Fitzgerald-Holley moved the money into his personal bank accounts and used it to buy clothing, furniture, a pool table and televisions. He is also accused of using it to cover the cost of a vacation rental and purchase a 2020 Dodge Charger.
Fitzgerald-Holley agreed to forfeit the Charger as part of his plea deal, court documents show.
A grand jury indicted Fitzgerald-Holley in July. He faces up to 20 years in prison at sentencing on March 7.