Five face federal charges for COVID relief fraud

WHEELING -- A former House of Delegates candidate and an employee of Hancock County Schools are among five charged in U.S. District Court For Northern West Virginia with fraud relating to COVID relief dollars. 

William Ihlenfeld, U.S. attorney for the Northern District of West Virginia, announced the indictments Wednesday during a press conference at the Federal Building in Wheeling. 

— The former candidate, Dalton Haas, 27, of Wheeling has been charged with seven counts of wire fraud, as well as five counts of making false statements to small business administration regarding businesses he purportedly owned. 

The complaint states Haas allegedly submitted fraudulent Economic Injury Disaster Loans applications asking for $10,000 each for the Lebanese Restaurant and Bakery, the West Virginia Hockey League, the Wheeling Wine Festival, the Wheeling Hockey Association and for advancements of the money on three of those applications. 

He is also alleged to have falsely told the Small Business Administration when applying that the Lebanese Restaurant and Bakery had revenue a year prior to the pandemic and 25 employees "when he knew the business was not in operation," according to the complaint. 

Similarly, it states he allegedly misreported revenues and employees for the West Virginia Hockey League, the Wheeling Wine Festival, and the Wheeling Hockey Association.  

The government seeks restitution "of at least $20,000," according to the complaint. 

— Jodi Headley, 49, of Chester is listed as an employee with Hancock County Schools in the complaint. She faces one count of mail fraud for allegedly attempting to obtain Pandemic Unemployment Assistance dollars while employed with the school system. 

The court is asking for a money judgment of at least $20,979. 

Messages left with Hancock County Schools were not immediately returned Wednesday. 

— Shawn M. Murphy, 47, Moundsville has been charged with 16 counts of wire fraud. The complaint states Murphy allegedly applied for and received unemployment benefits despite being employed by Warren Distribution or Tecnocap LLC. 

The money judgment asked for by prosecutors is $37,127. 

— David Boyd, age 27, Chester was indicted for wire fraud and making a false statement to a federal agent. Boyd submitted a Paycheck Protection Program loan application for his purported business, Seafood Hut, in New Cumberland, seeking $20,832.The money was used to pay for his own personal expenses, according to the complaint. 

The complaint next states that Boyd told FBI agents he was the victim of identity theft, and that someone had taken his identity to submit the PPP Loan application. 

The government seeks restitution of at least $20,832. 

— James A. Nolte, age 51, Bridgeport, W.Va., does not have ties to the Northern Panhandle but he is alleged to have defrauded the government of $645,717. He is charged with five counts of wire fraud and 16 counts of money laundering. 

Nolte submitted PPP applications "in the name of a business he owned, or the names of a business others owned," according to the complaint. He allegedly misrepresented facts regarding the businesses, including the number of employees at the business and the monthly payroll. 

He was awarded $100,922 for PGO Veteran Services, for which he allegedly submitted fraudulent wage reports and tax documents, the complaint continues. Nolte "falsely reported a monthly payroll of $40,369 for four employees," and to support the application he allegedly submitted fraudulent wage reports and tax documents, the complaint states. 

Nolte also submitted a loan application for PG Health and was awarded $149,000 after allegedly submitting false tax documents and wage reports. 

Similarly, he submitted a loan application for RJS Catering and received a loan for $100,295 with false information, as well as for Dental Care Plus at $144,900, and a second loan for PG Health at $149,700. 

"As a result ... the United States was defrauded out of a total of $645,717," the complaint states. "(Nolte) used the proceeds of his fraud to his own personal benefit, paying for his own personal expenses." 

Nolte also faces 16 separate charges for an unlawful monetary transaction for each time the money was used in a way affecting interstate commerce. 

All of the charges against the five indicted are felonies, Ihlenfeld said. Penalties that could be imposed will be based on the amount of fraud, the specific penalties called for in the law, and also whether the defendant has any past criminal history. 

"Past history will become a factor, and there will be a pre-sentence investigation," Ihlenfeld said. 

Among those joining Ihlenfeld for Wednesday's press conference were Assistant U.S. Attorney Jennifer T. Conklin; Michael Nordwall, special agent in charge, FBI Pittsburgh; Timothy Bledsoe, integrity unit director, fraud investigations, Workforce West Virginia; and Jeff Andreas, investigator, integrity unity, Workforce West Virginia. 

The federal government pushed out nearly $5 trillion to assist Americans - both businesses and individuals - negatively affected by the COVID pandemic, according to Ihlenfeld. 

"Because the government moved so quickly, because it had to push out the money so rapidly, we had some people who took advantage of the situation," he said. "We had some people who manipulated the programs that were rolled out." 

When he returned as U.S. attorney in October 2021, Ihlenfeld said he formed a team to look into issues pertaining to COVID-related fraud. This included both attorneys and accountants "who look at these cases everyday," he explained.  

He added law students also were hired by the office during the summer to concentrate specifically on COVID fraud cases. 

Ihlenfeld encouraged those who suspect someone they know may be involved in COVID fraud to report it at WVFraud@FBI.gov.