Kimberly McCollum, co-owner of Island Services Group, appeared before U.S. Magistrate Judge Emile Henderson III for an initial appearance hearing after being charged with theft of $500,000 in Coronavirus Relief Funds. McCollum was released after posting a $500,000.00 bond, United States Attorney Delia L. Smith announced Tuesday.
According to court documents, in March 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act into law. The CARES Act was designed to provide emergency financial assistance to millions of Americans who were suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the provision of forgivable loans to small businesses for job retention and certain other specified expenses through a program referred to as the Paycheck Protection Program (“PPP”).
In 2020 and 2021, McCollum and her co-defendant, Morris Anselmi, devised a scheme to defraud the United States, through the Small Business Administration and United Fidelity Bank, by obtaining a $989,400 PPP loan to cover business expenses for their St. Croix company, Island Services Group. McCollum unlawfully transferred $500,000.00 of the PPP funds to her personal bank account which was used to pay debts owed by a separate business owned by McCollum, and to purchase a $200,000 annuity in her name. McCollum later applied to SBA for forgiveness of the PPP loans, which falsely claimed that the funds were used for authorized purposes when, in fact, a portion of the PPP loan proceeds were used to personally enrich McCollum and Anselmi. For his role in the fraud scheme, he acquired a condominium valued at approximately $250,000 that was transferred from McCollum to Anselmi as payment. Anselmi will appear for his initial appearance hearing at a date to be set by the court.
