SEATTLE, WA – Donte McClellon, a 30-year-old from New York City, was sentenced today to 42 months in prison on charges of wire fraud and bank fraud for misusing the COVID-19 Paycheck Protection Program (PPP). U.S. District Judge Lauren King handed down the sentence in Seattle, highlighting the severe societal impact of McClellon’s actions during the pandemic.
According to U.S. Attorney Tessa M. Gorman, McClellon exploited the emergency relief measures intended to support struggling small businesses during the COVID-19 crisis by fabricating applications under dormant business names. In May and June 2020, McClellon successfully obtained $500,948 in loan proceeds from three different financial institutions using falsified documents.
McClellon’s fraudulent activities involved the use of three inactive LLCs he had previously registered in Washington—Frostlake, Cannonlake, and Skylake. He falsely claimed these entities were operational with up to 13 employees and gross receipts surpassing $1.6 million. Forged IRS forms supported his claims of running viable real estate, wholesale, or retail businesses.
The funds, however, were not used for business purposes. Instead, McClellon directed them towards personal expenses including rent for a Manhattan apartment, travel, gym memberships, and approximately $20,000 in Uber rides. The loans were disbursed into newly created bank accounts or directly into his personal account.
Judge King criticized McClellon’s lack of remorse and the broader impact of his actions, which burdened the already strained loan application system and deprived genuine businesses of critical financial support. The sentence aims to reflect the gravity of the offenses and the need for accountability in the use of pandemic-related financial assistance programs.
