Fairhope man sentenced to 2½ years for $1.2 million COVID-19 fraud

Published: Nov. 18, 2022 at 1:14 PM CST
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MOBILE, Ala. (WALA) - Of all the people charged in southwest Alabama with defrauding the Paycheck Protection Program, Jason Carl Pears likely got the most money.

Pears, who pleaded guilty to two counts of wire fraud in August, admitted to filing a pair of fraudulent applications to the COVID-19 relief program and netting more than $1.2 million. On Friday, a judge sentenced him to 2½ years in prison. That prison term stands apart form most of the other COVID prosecutions in Mobile, which generally have resulted in probation.

“This is the one that got the most attention,” defense attorney Tom Walsh said.

Congress created the Paycheck Protection Program as part of the Coronavirus Aid, Relief, and Economic Security, or CARES Act. It was designed to keep workers on company payrolls while they were idled by COVID-19 restrictions. But in the rush to get money to businesses as fast as possible, the government sent tens of billions of dollars to criminals, according to estimates by government watchdogs.

Walsh said his client was able to get more than $1 million from an application process that took two to four days.

“The government created this problem by shutting down businesses,” he said. “And then they’re solution was to print money and give it away as quickly as possible. … It was a program designed for fraud.”

Pears, a 38-year-old Fairhope resident, filed applications on behalf of two businesses – The Jason Made It Co. and Nanny For A Week.

According to his plea agreement, Pears submitted a fabricated Internal Revenue Service W-3 indicating that The Jason Made It Co. had wages of $442,738 in tax year 2019. He also submitted a fabricated check purporting to be from the company’s checking account.

The application claimed an average monthly payroll of $80,959 and that the company had seven employees and that the money would maintain salaries for workers.

Nanny For A Week was a company once operated by the defendant’s disabled mother but had been shut down for many years before the pandemic, according to the plea agreement. For that loan, according the plea document, Pears submitted a fabricated W-3 form claiming wages of almost $4.4 million. That application also had a fabricated check, falsely claimed an average monthly payroll of $386,628 and purported to employ 78 people.

Pears admitted that he used the funds to buy a piano, “voluminous luxury goods” from high-tend retailers like Louis Vuitton and Gucci, and furniture. Investigators also determined that funds from the program paid for cosmetic surgery, elaborate trips and vehicles – including a 1999 Mercedes G500.

In addition, Pears admitted, he used Paycheck Protection Program money to buy a pair of properties, at 754 Marine Street and 960 Dauphin Street.

At the time of the defendant’s plea, Acting U.S. Attorney Sean Costello hailed the conviction and suggested the prosecution serves as a warning.

“Criminals who refuse to play by the rules and lie, cheat, and steal money will be tracked down,” he said in a prepared statement. “We continue to work with our partners in law enforcement to identify and prosecute anyone who abuses the system for their own selfish gain.”

In addition to the prison time, U.S. District Judge Terry Moorer ordered Pears to be supervised for three years by the U.S. Probation Office after his release. In addition, he ordered Pears to pay back the money and undergo mental health treatment and evaluation.

Walsh said the real estate will be sold, which should fetch about half of the restitution cost. After that, he said, his client will make monthly payments after he gets out of prison. He said it was “absolutely absurd” to set up a program offer so much taxpayer money with so few safeguards.

“My client is still getting emails saying, ‘Hey, we’ve got money for you,’” he said.

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