Three guilty of covid relief fraud

FAYETTEVILLE — Three people pleaded guilty in federal court Wednesday for lying to obtain coronavirus relief money.

Melvin Stout, 40, of Fayetteville, pleaded guilty to making a false statement on a loan application to obtain money through the Small Business Administration’s Paycheck Protection Program. Earlier this month, Stout’s wife, Tiffany Acuff, 36, and sister, Valarie Watson, 43, both of Fayetteville, pleaded guilty to charges in connection with obtaining the loans.

The program, which provides low-interest, forgivable loans for businesses using the money for essential business expenses, such as payroll, is part of the Coronavirus Aid, Relief, and Economic Security Act, passed in March 2020.

According to the plea agreements in each case, Stout, Acuff and Watson submitted loan applications falsely representing their ownership of small businesses, which they claimed were eligible for the federal money. Stout was approved for and received $9,400. Acuff was approved and received $20,800. Watson applied for $20,800 but was declined. Along with the applications, the defendants submitted falsified tax documents and business receipts. None of the defendants owned the businesses listed in the applications.

Stout, Acuff and Watson will be sentenced later. The maximum penalties for each defendant include imprisonment for up to five years and a fine of up to $250,000.

The case was investigated by IRS, the FBI and the Treasury Inspector General for Tax Administration.