Eastern District of Texas joins DOJ Fraud Division, SBA, and SBA OIG in COVID-Era Loan Takedown Exceeding $245 million in Fraud
Joint national takedown: 40 U.S. Attorney’s Offices, along with 20 federal and state investigative agencies, participate in two-month enforcement surge
PLANO, Texas –The U.S. Attorney’s Office for the Eastern District of Texas today announced results as part of a nationwide enforcement action led by the Justice Department’s National Fraud Enforcement Division, the Small Business Administration, and the SBA Office of Inspector General targeting fraud in the SBA’s Paycheck Protection Program (PPP). The Eastern District of Texas was a key participant in this surge effort.
From June 12 to September 1, federal prosecutors across the country facilitated fraud enforcement actions involving over 160 defendants and approximately $245 million in intended loss to American taxpayers.
“In the Eastern District of Texas, we will spare no effort to recover ill-gotten gains,” said U.S. Attorney Jay R. Combs. “These funds were intended to keep small businesses alive, not fund the lifestyles of individuals taking advantage of the programs.”
“Pandemic loan relief was meant to keep American small businesses alive during government lockdowns—not line the pockets of fraudsters,” said Attorney General Todd Blanche. “The defendants charged during our summer surge allegedly fabricated businesses, submitted false payroll and revenue claims, stole identities, and concealed foreign ties on their applications— but they will now be prosecuted to the fullest extent of the law.”
“This summer surge shows what is possible when dedicated public servants across the country work together with a single purpose,” said Assistant Attorney General Colin M. McDonald of the National Fraud Enforcement Division. “Our mission is clear: protect taxpayer funds, safeguard the integrity of federal relief programs, and deliver justice to those who exploited them. We will remain steadfast every day—standing shoulder-to-shoulder with our partners—to identify fraud, pursue those responsible, and restore confidence in the programs meant to help American small businesses thrive.”
“Today’s announcement represents the largest-ever action against perpetrators of SBA fraud, with 870,000 suspended borrowers tied to $39 billion in suspected fraudulent PPP and COVID EIDL activity. In partnership with Vice President Vance and the White House Task Force to Eliminate Fraud, we’re putting fraudsters on notice: the federal government will no longer turn a blind eye to those who stole from taxpayers and exploited programs designed to sustain small businesses during the pandemic,” said SBA Administrator Kelly Loeffler. “With demand letters going out to suspected fraudsters, we’re also sending a clear message that they must repay their debts or face Treasury collections and possible federal law enforcement. Under this Administration, the free ride is over. We are restoring accountability, recovering taxpayer dollars, and protecting SBA programs for the legitimate small businesses they were created to serve.”
“Operation No Doze brings a focused and coordinated approach to pursuing fraud in SBA’s pandemic relief programs,” said SBA Inspector General William Kirk. “By concentrating our investigative resources and working closely with SBA and our law enforcement partners, we are strengthening our ability to identify fraud, recover taxpayer funds, and hold accountable those who exploited programs created to help small businesses in a time of extraordinary need. This initiative makes clear that the passage of time does not diminish our commitment to accountability.”
In the Eastern District of Texas, U.S. Attorney Jay R. Combs announced that three defendants have pleaded guilty and are awaiting sentencing. Two other defendants have been set for trial.
On August 12, 2026, Weldon Greer, Jr., 61, of Houston, pleaded guilty to conspiracy to commit wire fraud and faces up to 30 years in federal prison. According to information presented in court, from 2020 through 2021, Greer conspired to fraudulently obtain dozens of PPP and EIDL loans by submitting falsified supporting documentation to the SBA. The total loss to the SBA was at least $8,394,561. Greer’s co-conspirator, Jarrod Durant Wilburn, 58, of Houston, has also been charged and is set for trial on October 13, 2026, in Beaumont. This case is being prosecuted by Assistant U.S. Attorney Donald Carter.
On August 13, 2026, Thomas Flanagan, 66, of Beaumont, was indicted by a federal grand jury and charged with four counts of wire fraud. According to the indictment, Flanagan is alleged to have submitted falsified applications for forgiveness of PPP loans for two businesses, James Flanagan Shipping Corporation and P.C. Pfeiffer Co. Inc., resulting in a loss to the SBA of $1,514,917. If convicted, Flanagan faces up to 20 years in federal prison. Flanagan is set for trial in January of 2027 in Beaumont. This case is being prosecuted by Assistant U.S. Attorney Jim Noble.
Craig Bennett, 51, and his wife, Chemika Bennett, 53, of Celina, pleaded guilty to conspiracy to commit wire fraud. The Bennetts applied online for PPP loans under their own names, as well as business names using fraudulent statements and information claiming the loans would be used for business expenses and employee payroll. However, the Bennetts did not have employees or business expenses, and the loans were sued for their personal expenses. The loss to the SBA is $697,000. The couple faces up to 20 years in federal prison and will be sentenced on November 10, 2026, in Sherman.
These cases were investigated by the SBA – Office of Inspector General and the FBI.
On April 7, the Department of Justice announced the creation of the National Fraud Enforcement Division (“Fraud Division”). The Fraud Division is laser-focused on investigating and prosecuting those who commit fraud against the American people. The Department’s work to combat fraud supports President Trump’s Task Force to Eliminate Fraud, a whole-of-government effort chaired by Vice President J.D. Vance to eliminate fraud, waste, and abuse within Federal benefit programs.
An indictment, information, or complaint is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.