They got Al Capone on tax evasion, and now federal prosecutors have managed to bust up a Louisiana street gang by charging two dozen people with pandemic benefit fraud.
Authorities say the Step or Die gang, based in Shreveport, kept making up fake businesses and employees and filing for small business loans.
Gang members applied for 42 loans worth $2.2 million and walked away with $600,000 in actual payouts, prosecutors charged in an indictment unsealed this week.
Authorities said the money was used to fund the gang’s activities.
“Prosecuting violent street gangs with white collar statutes is rare, but we use all the tools we have and try to hold those accountable that break the law and terrorize our communities with acts of violence,” said Brandon B. Brown, the U.S. attorney who announced the charges.
According to court documents, the gang members used fabricated bank statements and federal tax forms to suggest they ran burgeoning businesses struck hard by the pandemic.
Nico Stewart, a defendant who has agreed to plead guilty, said he applied for 11 loans from March 3, 2020, to July 2, 2021.
One 2021 application was for a Paycheck Protection Program loan, seeking $20,000 for a company he listed as K&K Trucking. He submitted a 2020 bank statement to back up his claim, but it was fake. He didn’t even create that bank account until 2021.
He also claimed a gross income of nearly $125,000 in 2020 and said he needed the loan to pay employees. But his state records showed he didn’t have any employees at all.
Banks rejected paying on all the full loans he requested, but he did walk away with two advance payments of $4,000 and $1,000.
Mr. Stewart and 22 of the other defendants have been arrested. One, Roderguiz Henry, is still a fugitive.
Step or Die isn’t the only street gang to get caught up in pandemic fraud.
The Brooklyn, New York-based Woo gang walked away with $4.3 million in bogus pandemic unemployment claims, authorities said in bringing charges last year.
They pointed to social media posts of alleged gang members showing gang signs, displaying stacks of cash or flaunting expensive vehicles.
In the case of Step or Die, prosecutors showed the court social media posts of one defendant waving a gun in a video, and another fanning out handfuls of cash.
In perhaps the most infamous clash of social media and pandemic fraud, Fontrell Baines, also known as the rapper Nuke Bizzle, posted a video on YouTube of a song where he sang about engaging in COVID-related unemployment fraud — and used footage of himself mailing bogus applications.
For more information, visit The Washington Times COVID-19 resource page.
• Stephen Dinan can be reached at sdinan@washingtontimes.com.
Please read our comment policy before commenting.