The PPP Preacher The story of Pastor Rudolph Brooks Jr. is
far from a holy Christmas tale.
This DC preacher found himself in hot water after scamming the federal government of roughly
one and a half Million in Covid-19 PPP loans.
Brooks was the founder and leader of Kingdom Tabernacle of Restoration Ministries in Washington
DC.
He used the PPP money to purchase 39 cars, a Baltimore home, and cover $300,000 thousand
dollars in personal expenses.
So just how did this DC priest pull off this scam?
What’s a PPP?
Here’s the quick background on the Paycheck Protection Program, or PPP for short.
This was part of the Covid-19 relief package passed in 2020 that provided billions of dollars
in aid to businesses.
It aimed to help businesses cover payroll expenses of their employees after they were
forced to close because of the Covid-19 pandemic.
A PPP loan was issued by private lenders like banks and credit unions.
The PPP covered 2.5 months' worth of payroll expense based on the prior year's payroll
total.
PPP funds were issued as a loan, but the money was forgivable if the business met certain
circumstances.
For the loan to be forgiven, 60% of the funds needed to be spent on payroll expenses.
The rest was for maintaining the business and covering expenses like bills, rent, and
mortgages.
In the same Act, another program called the Economic Injury Disaster Loan granted money
to targeted industries that needed money to stay open, something that Brooks applied for
as well.
Rudolph the Entrepreneur When Brooks wasn’t sharing the gospel, he
was busy running two other businesses.
At least that's what he wanted the State of Maryland to think.
Brooks operated Cars Direct, Madaro LLC, and Kingdom Tabernacle of Restoration.
To break it down, Cars Direct was a business that Brooks opened in October of 2010.
Its sole purpose was to buy and sell cars.
By October 1st, 2012, Brooks had forfeited the company, meaning that he stopped paying
the registration fee for the business.
The State of Maryland charges a licensing fee to run a business, and if a business fails
to pay that fee, it’s marked as forfeited, meaning the firm isn’t active and not conducting
business.
The Scam On May 9, 2020, Brooks submitted an application
on behalf of Cars Direct for a PPP loan.
Brooks had to show proof of payroll from 2019, 2020, or the past 12 months to apply for PPP.
According to the forms he submitted, Cars Direct paid $622,635 per month in payroll
expenses—but things got even crazier.
On his application, Brooks stated that Cars Direct only had 10 employees.
That means each employee was making around $62,000 thousand dollars per month!
But Brooks had to resurrect Cars Direct for the loan to be approved.
And Cars Direct was brought back from the dead on May 28th of 2020.
Brooks got his money on May 12th.
Even though Brooks wasn’t smart enough to think ahead, somehow, Cars Direct still qualified
for a loan of a little more than one and a half million dollars!
In addition to the PPP application, Brooks also submitted an EIDL loan request on behalf
of his church.
In this EIDL request, Brooks claimed that the business only earned a yearly income of
$148,000 in gross revenue.
For some reason however, Brooks used the Tax ID of Cars Direct for this EIDL application.
Obviously, the numbers didn’t match up.
It grossly contradicted the PPP loan application for Cars Direct.
In case you didn't know, a Tax ID is like a social security number for a business.
No two are the same.
Some quick math tells us that $622,000 in payroll per month is just over $7 Million
in payroll per year.
Brooks claiming that his yearly income was $148,000 thousand meant that he was losing
$7 Million dollars every year.
That, or Cars Direct was the most successful used car lot in the history of Washington
DC!
It begs the question.
How or why did Brooks think he'd get away with any of this?
The Spend Unlike most Americans, Brooks was living the
high life during the pandemic.
On May 12th of 2020 that roughly one and a half million landed in the Cars Direct bank
account.
Here’s a fun fact.
Brooks's account, before the PPP loan deposit, had an average daily amount of $47 dollars.
That money went to various personal expenses, including mortgage payments, shopping trips,
travel expenses, and more.
Now here's where things get a little complicated.
To hide the PPP funds, Brooks made several strange moves in an attempt to hide the scam.
First, he opened an additional account with Bank of America titled "Payroll by BJM."
He then registered that account with the Maryland State Department of Assessments and Taxation.
From there, he transferred half a million of the PPP money from Cars Direct to Payroll
by BJM.
That money sat there and was never used to process anything related to payroll.
The story doesn't end there.
In addition to the payroll transfer, Brooks decided to open two additional accounts with
Bank of America.
Both accounts were registered to Cars Direct.
One was checking; the other was savings, and Brooks transferred $250,000 thousand dollars
to each one.
This puts his total transfers out of the account to $1 Million bucks.
Brooks also transferred a lot of money to his personal Bank of America account, roughly
$311,000 thousand.
He bought groceries and paid his bills.
He shopped at malls and visited car auctions.
And this is where he went nuts.
Loan Rejection You may be wondering why the Small Business
Administration would ever approve a crazy loan request like this.
Unlike a traditional secured or unsecured loan, the PPP didn’t require a credit check
or background verification.
It was the responsibility of the issuing bank to do their homework.
Because of the high influx of applicants for the PPP loans, it was easy for scammers such
as Brooks to sneak through the wide open cracks.
Brooks could get away with this because most issuing banks simply didn’t verify the information
submitted outside of what was required by the SBA.
It was easy to forge IRS forms and submit them alongside the other documents needed
in the PPP application.
In addition, it was easy to get approval for these applications just because of the high
number of people applying for these loans.
There were way too many people to do proper due diligence.
Brooks' PPP loan was likely approved because it didn't raise any red flags.
But $62,000 thousand a month for a used car salesperson in DC?
Really?
That didn't raise a flag?
The Cars Cars Direct was registered with the state
of Maryland as a used car lot.
As expected, plenty of car dealers often buy their inventory from auctions.
Plenty of Auctions sell repossessed cars, salvage titled cars, and former government
cars.
It’s unclear from court documents and online research whether Brooks made any income from
Cars Direct's legitimate years.
But if we had to guess from its short-lived stint from 2010 until 2012, Cars Direct was
a failed business.
What WAS clear is that Brooks knew how to buy cars.
In total, he spent roughly four hundred twenty thousand dollars at car auctions using PPP
money from his personal account and Cars Direct account.
In total, he bought 39 cars, including a Tesla Model 3, a 2005 Bentley Continental, and a
2015 Cadillac Escalade.
It’s unclear if Brooks actually sold any of the cars that he bought.
Maybe he was trying to make another go at it in the car business, and he could make
a case where he EVENTUALLY would be paying out that money for employees he was going
to hire.
That’s basically the best case explanation for what he was doing.
But what’s clear are the PPP guidelines.
They required that funds be spent on payroll, rent, or mortgage for the business.
None of the funds received by Brooks were ever spent on any of the approved items.
The Baltimore Residence In late 2020, Brooks transferred funds from
the Cars Direct account to a titling company in Baltimore.
That’s when he used around a hundred fifty grand to buy a house in the city.
The listed buyer was Madaro LLC, a DC registered company.
Surprise surprise, Brooks is listed as the owner!
Obviously Brooks is a rookie at money laundering!
This was a really dumb mistake for Brooks, among all the mistakes he made.
Had he bought the property in the name of Cars Direct, there’s a slight chance that
he could have argued it was purchased within the guidelines of the PPP as a legitimate
business expense.
Although the mountain of evidence would still likely put him behind bars, he could have
at least done just ONE thing right!
Government Notice The FDIC launched an investigation into Brook's
loan applications in July of 2020.
This is the same government entity that insures the money in your bank up to $250 grand!
According to court documents, a quick due diligence led investigators to quickly realize
that the numbers on the applications did not add up.
The first thing investigators did was check the IP address of both applications.
They indeed were the same.
The IP address used to submit both applications was from Brooks's home in Bowie, Maryland.
However, the investigators found that Brooks had intentionally misspelled his first name
and left out his suffix with his internet provider.
It was listed as Randolf Brooks.
Come on; even Scooby-Doo villains are smarter than that!
Now that investigators knew the same person submitted the two applications, it was time
to get to the bottom of these crazy claims.
Investigators turned their attention to the Maryland Department of Labor, which confirmed
that Brooks hadn’t paid any wages to any of his registered businesses.
Investigators confirmed that Brooks was the one who submitted the applications and that
the applications themselves were fraudulent.
They were tracking Brooks from the beginning.
It was clear to them that he was using his business account as his personal account!
Obviously, the most incriminating pieces of evidence in the investigation was the lack
of payroll expenses.
It showed that Cars Direct wasn’t a legitimate employer since there was no one employed other
than Brooks.
This was inconsistent with the $622 grand in payroll that Brooks claimed on the PPP
application and forged IRS forms.
All of this evidence created enough probable cause to charge him with wire fraud!
Aftermath Brooks faces 20 years in federal prison and
is currently standing trial.
If found guilty, he likely faces the maximum sentence due to the nature of his crime.
Many legitimate business owners were denied PPP loans due to funding availability.
However, Brooks is one of many scammers caught up in PPP fraud.
It's estimated that as of January 2021, over $341 Million dollars in PPP loans were given
out to scammers.
It's easy to focus on the big money and fraudulent practices of people like Brooks.
Unfortunately, there are always innocent people left in the wake.
His church, Kingdom Tabernacle of Restoration Ministries, seemingly disappeared from the
face of the earth, and their website has since been taken down.
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