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Mount Vernon city employee, daughter charged in $1.6 million COVID-19 relief scheme

Jonathan Bandler
Rockland/Westchester Journal News

A Mount Vernon union official, her daughter and a former city resident were arrested by the FBI Tuesday on charges of running anearly $1.7 million pandemic relief fraud scheme by submitting applications for more than 300 people to claim federal loans for businesses that did not qualify.

Andrea Ayers, a civilian employee in the Mount Vernon Police Department, and Alicia Ayers, who runs a travel agency and financial services company, were arrested in Mount Vernon.

Traci Proctor, who also worked in Mount Vernon city government a decade ago, was arrested in Georgia. All three are charged with wire fraud, aggravated identity theft and making false statements in the scheme that defrauded the Small Business Administration’s Economic Injury Disaster Loan program. They could face up to 20 years in prison.

Mount Vernon City Hall.

According to federal prosecutors, $1.69 million was paid as part of the scheme and many of the recipients kicked back between $1,000 and $5,000 to the defendants. Text messages reviewed by FBI agents showed the women concocting fake businesses with some applicants. One applicant was promised $1,000 for each person they recruited to the scheme, and they said they would only share with people they knew.. 

They would "laugh straight to the bank," she texted.

“As alleged, the defendants schemed to defraud the SBA by submitting disaster loan and grant applications for non-existent businesses," said U.S. Attorney Audrey Strauss in announcing the arrests. "In so doing, they stole funds intended for the many small businesses that are struggling as a result of the COVID-19 pandemic."

Both the Ayers appeared before U.S. Magistrate Judith McCarthy in White Plains and were released on $150,000 bond. Proctor was released on bond following an appearance in federal court in Georgia and has an appearance before McCarthy scheduled for Thursday.

Royce Russell, a lawyer for Andrea Ayers, declined to comment. A lawyer for Alicia Ayers could not immediately be reached.

The Journal News/lohud reported last month on more than 400 city residents who received the maximum $10,000 EIDL advances that required them to own businesses with at least 10 employees, even though most didn't seem to have such businesses.

The grants were different than EIDL loans as they were advances that did not have to be repaid. Businesses were to receive $1,000 per employee, up to $10,000. 

COVID RELIEF: Hundreds in Mount Vernon get questionable Covid-19 grants

In many cases, the women created businesses that did not exist and in others they applied for businesses that had fewer than 10 employees, according to the U.S. Attorney's Office.

Many of the recipients who gave their pedigree and bank account information to the Ayers were under the impression that the money was for homeowners or renters, not that they had to own businesses.

One applicant who learned that and tried to stop the application reported to authorities what had happened and their application was denied.

Andrea Ayers, 54, whose father is a retired Mount Vernon police detective, is the local CSEA union representative for Mount Vernon city employees and also runs a catering business. She was suspected of spreading the word about the grant money among city employees, at least 27 of whom received the maximum $10,000 advances.  

She and her daughter, who is 34, each got pandemic relief money for their businesses last year - $6,000 for Andrea and $1,000 for Alicia - as did at least three of their relatives.

Officials with the U.S. Attorney's Office and the FBI would not acknowledge to The Journal News in the fall that an investigation was ongoing. But when news of the scheme became public and that it might have been going on in City Hall, Mayor Shawyn Patterson-Howard directed employees who had received pandemic relief money to report that to city officials. 

Seventeen employees did so and city officials reported that to the FBI. The list was not made public.  Patterson-Howard had no immediate comment on the arrests  Tuesday afternoon but did say that Andrea Ayers was not among those who reported receiving federal money.

Police Commissioner Glenn Scott said Ayers has been suspended without pay.

In phone conversations with The Journal News/lohud since the fall, both Ayers women denied any wrongdoing.

But included in the criminal complaint was a June 24, 2020, text conversation in which they talked about lining up people for the advances. 

"Send me what you need from people so I can get the info and have it lined up," Andrea texted.

Alicia responded that she shouldn't tell too many people, to "hold on it", "because it was someone else's hustle I stole." Andrea said OK, but wondered why.

"If I'm not paying him its like stealing from him," Alicia answered.

Alicia told Andrea it was ok to line up people in Queens and texted her the pedigree information she needed from each applicant.

Andrea asked her if they could apply for people out of New York because "(name omitted) will hustle the (expletive) out of this."

Alicia then explained to her how the advance money was different from the loan and didn't have to be repaid.

"But how do you know they won't ask for it back?" Andrea asked.

"Because it's a grant. Grants are free."

In addition to stating how many employees they had, applicants' businesses had to be established before January 2020 and have certain revenues the previous year to qualify for the money. But of the 45 recipients interviewed by the FBI, none said they were asked by the defendants any of those details about their businesses.

The 315 applications from June 22 to July 9 - which sought more than $3 million in grants - were traced back to computers in Andrea Ayers' home, an apartment in Stamford, Conn., where Alicia Ayers lives part-time, and from computers in DeKalb County, Georgia, where Proctor lives. Applications were supposed to identify anyone who assisted the business owner but none of the defendants' names were ever included.

A nationwide SBA database of advance grants reviewed by The Journal News seems to back up what Alicia Ayers was telling her mother about someone else starting the scam. In May and early June - before they allegedly started applying for the maximum grants - 85 individuals in Mount Vernon got the $10,000, with no clear evidence they had businesses.

The program distributed 5.8 million grants totaling $20 billion nationwide and ran out of money in mid July. 

Twitter: @jonbandler