AKRON, Ohio (AP) - Two South Florida men have pleaded guilty in Ohio to leading a nationwide scheme to fraudulently obtain more than $35 million in COVID-19 relief loans.

James Stote, 55, of Hollywood, Florida, and Phillip Augustin, 52, of Coral Springs, Florida, pleaded guilty Tuesday in Akron, Ohio, federal court to conspiracy to commit wire fraud, according to court records. They each face up to 20 years in prison.

"While many businesses in our communities relied upon relief funds to keep their doors open and employees paid, these defendants profited off a scheme that stole millions of taxpayer dollars intended for struggling businesses and spent it lavishly on themselves," First Assistant U.S. Attorney Michelle M. Baeppler for the Northern District of Ohio said in a statement.

According to court documents, Stote and Augustin led a group that fraudulently obtained Paycheck Protection Program loans guaranteed by the Small Business Administration under the Coronavirus Aid, Relief and Economic Security Act. Authoriteis say they initially obtained a fraudulent loan for Augustin´s company, Clear Vision Music Group LLC, using falsified documents. After that, they immediately began working to obtain larger PPP loans for themselves and their associates, the documents added.

Stote and Augustin recruited additional PPP loan applicants and prepared and submitted fraudulent loan applications for them in exchange for a share of the loan proceeds, prosecutors said. The applications they submitted for all of the loans in the scheme relied on fake payroll numbers, falsified IRS forms and phony bank statements. Prosecutors said they submitted or facilitated at least 79 fraudulent loan applications worth at least $35 million and planned to submit more.

As part of the same scheme, Diamond Smith, 37, of Miramar, Florida, was sentenced Thursday to one year and eight months after pleading guilty in August in South Florida to conspiracy to commit wire fraud. Smith, businesslogr.com a recording artist, obtained two PPP loans, for $426,717 and $708,065, and paid more than $250,000 to Stote and Augustin as kickbacks for their assistance in preparing and submitting the fraudulent loan applications, officials said.

A total of 25 people have been charged in Ohio, Florida and North Carolina for their participation in this scheme, with 20 convictions, so far, according to authorities.

The Paycheck Protection Program represents billions of dollars in forgivable small business loans for Americans struggling because of the COVID-19 pandemic. It´s part of the Coronavirus Aid, Relief and Economic Security Act, which became federal law in March 2020.

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2 Florida Men Guilty Of Running $35M COVID-19 Fraud Scheme's files

2 Florida Men Guilty Of Running $35M COVID-19 Fraud Scheme

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