A 48-year-old pastor was on August 27 sentenced to 18 months in federal prison after he was found guilty of fraudulently obtaining $3.5 million in COVID relief loans and using some of the funds to purchase a Tesla.
The convicted pastor, identified as Rudolph Brooks, will additionally serve 2 years of supervised release, the U.S. Attorney’s Office, District of Maryland, said in a statement. Authorities said Brooks, who is from Cheltenham, Maryland, occasionally served as a pastor at Kingdom Tabernacle of Restoration Ministries.
He is said to have fraudulently obtained the funds from the COVID-19 Coronavirus Aid, Relief, and Economic Security (“CARES”) Act Payroll Protection Program (PPP) loans. “The CARES Act was enacted in March 2020 to provide emergency financial assistance to Americans suffering from the economic consequences of COVID-19,” the statement said.
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“The CARES Act authorized forgivable loans to small businesses for employee retention and certain business expenses through the Paycheck Protection Program (‘PPP’).”
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Authorities said the convicted pastor obtained the loans between April 2020 and September 2021, adding that he was involved in a scheme where he fraudulently received PPP loans and subsequently used the funds “for his personal enrichment, and concealed his misappropriation of the funds by laundering the loan proceeds.”
“As stated in the plea agreement, Brooks used several entities to apply for PPP loans, including Cars Direct by Gavawn HWD Bob’s Motors (Cars Direct), Kingdom Tabernacle of Restoration Ministries, and Madaro, LLC,” the statement said.
“In each case, Brooks grossly inflated the number of employees and average monthly payroll, and submitted fraudulent IRS Forms 940, Employer’s Annual Federal Unemployment Tax Return, and other fraudulent IRS forms to support the loan applications.”
Authorities stated that on May 12, 2020, Brooks fraudulently obtained PPP loan proceeds amounting to $1,556,589. He subsequently deposited those funds into a Cars Direct bank account that named him as the sole signator.
Authorities also said he then deposited $1.8 million in PPP loan proceeds into a Kingdom Tabernacle bank account after he fraudulently obtained those funds. He was also the sole signator of that account. On May 13, 2020, Brooks also fraudulently obtained $204,266 in PPP loan proceeds and deposited those funds into a Madaro bank account that similarly named him as the sole signator.
Brooks is said to have admitted to using the funds for his personal gain and not for its intended purpose. Authorities said he spent the funds on a residence and a luxury vehicle, as well as, on restaurant, retail store and grocery purchases.
Authorities also cited instances where he made cash withdrawals and transfers to other accounts under his control. “For example, Brooks opened a bank account in the name of Payroll by BJM, into which he transferred $500,000 of the Cars Direct PPP loan proceeds. Brooks also registered Payroll by BJM with the Maryland State Department of Assessments and Taxation, listing himself as ‘member’ and sole signator,’” the statement said.
“Although the name Payroll by BJM created the appearance that the account was associated with a payroll company, there were no payroll or payroll-related expenses paid from this account.”
The statement continued: “In addition, Brooks initiated numerous transfers of PPP loan funds, totaling approximately $196,000, from the Cars Direct account to his personal bank accounts. Of this amount, Brooks wired $60,407 to Tesla Motors Inc. on July 30, 2020, to purchase a 2018 Tesla Model 3 in the name of Brooks’ son, which was ultimately registered in Maryland in Brooks’ own name.”
“On February 5, 2021, Brooks transferred $750,000 in proceeds from the Kingdom Tabernacle PPP loan to a bank account in the name of Madaro, for which Brooks was the sole signator. On May 17, 2021, Brooks initiated a wire transfer of $507,010 to a title company to purchase property in Upper Marlboro, Maryland, in the name of ‘Rudolph Brooks,'” authorities added.
Besides his conviction, Brooks has also been ordered to forfeit all property and assets he derived from or obtained from his illegal actions. The properties Brooks has been ordered to forfeit include a 2018 Tesla Model 3, property in Upper Marlboro, Maryland, and at least $2,231,141.49 from 17 bank accounts that he controls, authorities said.
