Former trucking company owner in prison after pleading guilty in PPP fraud

August 28, 2024

A former trucking company owner from Acworth, Georgia, reported to prison Thursday, a day after a federal judge denied a motion to postpone his surrender following his sentencing in a Paycheck Protection Program fraud scheme.

Roderick Billingslea, 30, was sentenced to 30 months in federal prison in the U.S. District Court for the Northern District of Georgia on Aug. 13, nearly four months after pleading guilty in April to one count of wire fraud and one count of falsifying records related to a Paycheck Protection Program (PPP) fraud scheme.

Billingslea was ordered at sentencing to report to prison Aug. 20. However, a day before he was scheduled to report, Billingslea filed a motion seeking to push back the start of his sentence until Sept. 16, because one of his younger siblings had been hospitalized with a life-threatening medical condition.

U.S. District Court Judge Leigh Martin May partially granted Billingslea’s motion, allowing him to remain free for two extra two days and stated that she would consider granting Billingslea a longer extension if he provided “detailed medical records relating to his sister’s condition.” However, May denied Billingslea’s motion to postpone his report date by nearly a month on Aug. 21 after reviewing the medical records he submitted.

The judge also ordered Billingslea to pay nearly $600,000 in restitution and pay almost $50,000 per year for the cost of his incarceration. Once released from prison, he will serve three years of supervised release.

What happened?

Prosecutors say Billingslea submitted a fraudulent loan application to obtain funds through the U.S. Small Business Administration’s Paycheck Protection Program (PPP). He used the funds to continue operating multiple chameleon carriers, despite being barred from creating any successor trucking entities by the Federal Motor Carrier Safety Administration.

“Billingslea falsified documents in order to receive PPP funds to operate illegal and unsafe businesses that he was ordered to stop operating,” Ryan K. Buchanan, U.S. attorney for the Northern District of Georgia, said in a statement.

Federal prosecutors claimed that Billingslea filed multiple registrations with the U.S. Department of Transportation for at least five trucking entities that listed false owners and fake addresses, which violated Billingslea’s permanent ban by FMCSA that prohibited him from operating as a motor carrier.

Court documents alleged that Billingslea controlled and operated these illegal businesses by stealing the corporate identities of legitimate trucking businesses because he was unable to legally obtain insurance and used the drivers until they incurred safety violations, after which he hired new drivers and moved on to another illegal entity.

Feds crackdown on PPP fraud

Billingslea applied for and received a PPP loan for Billingslea Inc. from Atlanta-based Kabbage Inc. for over $564,000 in June 2020, claiming his trucking company had 25 employees and had monthly payroll expenses of over $200,000.

Although he was prohibited from creating any successor trucking entities, federal prosecutors claim Billingslea or someone acting on his behalf registered five trucking companies over a two-year period, from June 2020 through October 2022, which included E Cargo of Blacklick, Ohio; Hidden Valley Transport of Edgewood, New Mexico; US Transport of Harrington, Delaware; Midwest Express of Moorcroft, Wyoming; and Dispatch USA of Birmingham, Alabama.

His PPP loan was forgiven in April 2022 after Billingslea submitted false and fraudulent payroll lists, a false W-3 tax document and a false Georgia Department of Labor Employer’s Quarterly Tax and Wage report, according to court documents.

“This case underscores the critical role of oversight in safeguarding taxpayer dollars and ensuring that pandemic relief programs are not exploited by those who seek to commit fraud,” said Amaleka McCall-Braithwaite, special agent in charge of the Eastern Region of the SBA’s Office of Inspector General.

The PPP loan program was signed into law through the Coronavirus Aid, Relief, and Economic Security Act in March 2020 by President Donald Trump.

The program was designed to help struggling small businesses stay afloat during the pandemic, but federal investigators say fraudsters — including trucking-related businesses — took advantage of the SBA’s chaotic launch to vie for billions in government-backed forgivable loans. Many of the PPP loans weren’t properly vetted and lacked internal controls to prevent fraud, according to the SBA watchdog report that was released in October 2020.

A total of $800 billion was doled out in three waves to pandemic-relief funds to help struggling businesses. Since the PPP rollout, federal prosecutors are attempting to claw back nearly $65 billion in fraudulent and ineligible pandemic relief loans obtained through the program.

In February, Billingslea was charged in a seven-count criminal indictment with two counts of wire fraud for the PPP loan scheme and five counts of falsification of records for the five trucking companies registered after January 2020. When he registered the five trucking companies with FMCSA, court documents allege, Billingslea falsely answered no when asked if he currently had common ownership over the past three years with FMCSA-regulated entities.

However, prosecutors claimed Billingslea lied on the FMCSA applications because he had previously owned and operated three trucking companies over a two-year period before being shut down by FMCSA in January 2020.

FMCSA issued a final order for Billingslea to shut down Billingslea Inc., Freight Angels and Wild Bill’s Heavy Haul after he failed to correct serious violations of FMCSA’s hazardous materials regulations within 60 days of a compliance review conducted in November 2019.

Billingslea opened his first motor carrier, Billingslea Inc., in June 2018, which he incorporated in Florida. He listed its principal place of business as his home address in Acworth. In September 2018, he registered Billingslea Inc. with FMCSA by completing Form MCSA-1. On that form, he changed the company’s principal business address from Acworth to Jacksonville, Florida.

In July 2019, Billingslea registered a second entity with FMCSA, Freight Angels LLC, with its principal place of business as the same one listed for Billingslea Inc. in Jacksonville. However, the company’s mailing address was the same as Billingslea’s home address in Acworth.

Billingslea registered Wild Bill’s Heavy Haul LLC, a trucking company he owned and operated, with FMCSA in October 2019. On his Form MCSA-1, he listed the carrier’s principal place of business in Acworth, and its mailing address was registered to a P.O. Box in Grain Valley, Missouri.

Billingslea attempts to withdraw $1.4M after indictment, plea

In the government’s 12-page sentencing memorandum, it claimed that two days after Billingslea was arrested and arraigned on Feb. 20, the government was alerted that he had deposited $1.5 million into his personal Navy Federal Credit Union account and then tried to withdraw the entire amount in cash. However, the bank became suspicious of the transfer and froze the funds. Billingslea later agreed to the government’s request that he wouldn’t touch the amount owed in restitution, according to court documents.

As part of the conditions of Billingslea’s release after his arraignment, the judge granted the government’s request that he “cease operating all trucking business entities because Billingslea’s criminal conduct included repeatedly filing false motor carrier registrations in order to operate illegal trucking businesses.”

However, prosecutors allege that Billingslea ignored the judge’s order and continued to operate his illegal businesses.

After he pleaded guilty to wire fraud and falsifying records on April 11, prosecutors claimed that Billingslea violated the terms of his plea agreement, which stated that he would not hide any assets worth more than $1,000.

Billingslea opened two new business bank accounts at First Horizon Bank in the names of TLC Logistics and Dispatch USA on April 15, four days after signing the plea agreement. Court documents alleged that he deposited approximately $27,000 in small checks into the Dispatch USA account and deposited a cashier’s check for $1.4 million into the TLC Logistics account.

After depositing the funds into the Dispatch USA account, Billingslea allegedly told bank employees that he needed access to the account to make payroll for his business, prosecutors claimed.

After depositing the $1.4 million check in the TLC account, Billingslea attempted to withdraw the funds, but First Horizon froze the account and contacted the U.S. Secret Service. In court filings, the government said it was unaware of the existence of TLC Logistics, a trucking entity owned and operated by Billingslea, because he registered the business using false information.

“[His] sentence should send a clear message that, along with our law enforcement and prosecutorial partners, we will tirelessly pursue individuals who compromise trucking safety by intentionally ignoring or circumventing federal orders and regulations,” said Joseph Harris, special agent in charge, U.S. Department of Transportation Office of Inspector General (DOT OIG), Southern Region.

The case was investigated by the DOT OIG, Small Business Administration – Office of the Inspector General and the U.S. Secret Service.

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