A Memphis trucking company owner was sentenced to federal prison for a scheme to defraud the Paycheck Protection Program (PPP), authorities say.
Herman Shaw, 44, owner of Freight Masters, Inc., was sentenced to 30 months in federal prison on November 6, 2024. Shaw was also ordered to pay the the United States Small Business Administration $782,212 in restitution, according to the U.S. Attorney’s Office for the Western District of Tennessee.
On August 2, 2024, Shaw pled guilty to wire fraud.
Officials say that Shaw used an accomplice to help him fraudulently obtain a COVID-19 pandemic relief loan from the federal PPP program. The PPP loan application contained false information about Freight Masters, Inc., including about how many people the trucking company employed, the U.S. Attorney’s Office stated.
The $782,212 in loan proceeds were meant for uses like maintaining payroll, but officials say that instead, Shaw used the money to pay gambling debts and other personal expenses and to provide his accomplice with a $262,000 kickback.
“Individuals preying on the generosity provided by the Paycheck Protection Program stole money from U.S. taxpayers for personal gain without regard to the economic losses felt around the country. This sentencing reflects the severity of thefts from COVID-19 relief programs,” said Reagan Fondren, Acting United States Attorney for the Western District of Tennessee.
The case was investigated by the Small Business Administration, the U.S. Secret Service, the Treasury Inspector General for Tax Administration, the Federal Deposit Insurance Corporation, the Federal Housing Finance Agency, and the Pandemic Response Accountability Committee.