Man charged with COVID-relief fraud

Dale Holness’ former campaign consultant accused of fraudulently receiving over $200,000 in relief funds

A political consultant who has worked on South Florida campaigns, including for former Broward Mayor Dale Holness, lied on an application for COVID-19 payroll relief, federal prosecutors announced Monday.

Omar Smith, 42, of Royal Palm Beach, faces conspiracy to commit bank fraud and wire fraud charges in connection with a Paycheck Protection Program loan, prosecutors said.

A federal court document filed Monday says in June 2020, Smith applied for the $212,500 loan for his company, A Star For I, Inc. The document says Smith claimed he had 30 employees with an average monthly payroll of $85,000.

But prosecutors said Smith had no employees and no payroll expenses. Smith is accused of having a co-conspirator, who is not identified in court records, prepare the loan application and submit it online, court records say. He agreed to pay 20% of the loan amount to the co-conspirator who helped him apply.

A co-conspirator allegedly prepared an IRS Form 941 for the first quarter of 2019, falsely writing that Smith’s company paid $255,000 in wages in that quarter and listed taxes withheld, and submitted it online as part of the application, the court record says.

Based on the false information, Smith received the loan on June 2, 2020. He then transferred $42,500 a few days later to a co-conspirator to pay him for getting the loan for his company, the court document says.

Smith started to write checks between July through October 2020 from his company’s bank account to people “in order to make it appear as if A Star For I had fulltime employees” and was following the conditions of the loan, the court document says.

It is not clear to whom Smith is accused of writing the checks, but the court record says those people “did little, if any, work” for Smith’s company.

Attorney Nicole HamilScott, who is representing Smith, said investigations are underway and that “any and all funds that they have alleged have been taken was repaid in full” by Smith.

Hamil-Scott said Smith had “a legitimate company for which he had employees working with him.” As of Monday night, HamilScott said she does not know of anyone else who is being prosecuted in the case.

“It’s an unfortunate state of events that transpired. Very, very unfortunate to say the least … Unfortunate in the sense that … here is a company that … funds were obtained from a loan, funds were paid back and an individual is still being prosecuted, facing a possible prison sentence. So it’s unfortunate from that standpoint,” Hamil-Scott said.

State business records show A Star For I was filed as a for-profit corporation in January 2012. Its status is currently listed as inactive.

Holness’ campaign treasurer’s reports between 2019 and 2021 show multi

ple payments to Smith and his two companies, A Star For I and Flyer Smith. Over the course of those years, Holness’ campaign paid over $60,000 to Smith and his companies for consulting, printing and IT work, the reports say.

Holness, who is a Democratic candidate for Florida’s 20th Congressional District, said Monday night that Smith no longer works for him because he chose to “use other people for the campaign and their entities” and said he did not have information about the allegations against Smith.

Damara Holness, Holness’ daughter and former president of the Broward County Democratic Black Caucus, was sentenced to a year and eight months in prison in January for lying on an application for the same kind of loan. She applied for a $300,000 loan for her company, Holness Consulting, and claimed she had 18 employees with an average monthly payroll of $120,000.

Prosecutors said in a January news release that once Damara Holness got the money, she issued checks to people who agreed to help with the fraud for a fee. For each check, she was profiting about $1,000 for herself.

If Smith is convicted, he could face up to 30 years in prison and may have to pay up to a $1 million fine, according to prosecutors.