Texarkana Gazette

Maud man pleads not guilt to bilking U.S. for COVID funds

- By Lynn LaRowe

TEXARKANA, Texas — A Maud, Texas, man accused of fraudulent­ly applying for millions of government dollars meant to help small businesses survive the COVID19 pandemic pleaded not guilty Wednesday in a Texarkana federal court.

Samuel Morgan Yates, 32, appeared Wednesday morning with Texarkana lawyer Jeff Harrelson for arraignmen­t before U.S. Magistrate Judge Caroline Craven in Texarkana’s downtown federal building. Harrelson entered pleas of not guilty to two counts of wire fraud on Yates’ behalf. Assistant U.S. Attorney Jonathan Hornok appeared for the government.

Yates is accused of making two fraudulent applicatio­ns for funds through the Paycheck Protection Program authorized by the federal Coronaviru­s Aid, Relief and Economic Security Act enacted by Congress in late March 2020.

Yates allegedly claimed falsely that he needed the funds for his business, Lone Star Tuning.

“Lone Star Tuning was a sole proprietor­ship located in Maud, Texas. Defendant Samuel Morgan Yates was the 100% owner of Lone Star Tuning, and its business address was located at his residence. Lone Star Tuning had no operations prior to January 2020 and generated no revenue,” the indictment states.

Yates allegedly applied for millions in funds from the PPP program and received more than $500,000 in an account he maintained at a credit union in Texarkana, according to records.

“In the applicatio­n sub

mitted to the first lender, Yates allegedly sought $5 million in PPP loan proceeds by fraudulent­ly claiming to have 400 employees with an average monthly payroll of $2 million. In the second applicatio­n, Yates claimed to employ over 100 individual­s and was able to obtain a loan over $500,000,” the press release states.

Yates is also accused of submitting forged tax documents with each applicatio­n.

According to the indictment, the government is seeking Yates’ forfeiture of more than $500,000.

If convicted, Yates faces up to 20 years in federal prison and a fine up to $250,000 on each count.

Yates is currently free on a $10,000 unsecured appearance bond set for him in May when the government first charged him in a criminal complaint. Jury selection is currently scheduled for March before U.S. District Judge Robert Schroeder III. That date could change if either side requests more time or if convening a jury panel is deemed unwise in light of the pandemic.

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