Attorney General Moody and FTC file lawsuit to stop COVID-19 relief scam targeting small businesses

Attorney General Moody and FTC file lawsuit to stop COVID-19 relief scam targeting small businesses

TALLAHASSEE, Fla. — Attorney General Ashley Moody and the Federal Trade Commission are filing a lawsuit to stop a COVID-19 relief scam that targeted small businesses. In response to a joint complaint filed by Attorney General Moody and the FTC, a federal court in Florida has issued a temporary restraining order and appointed a receiver against Florida-based Grant Bae and its owner, Traeshonna P. Graham. The defendants allegedly marketed a bogus grant-writing service that falsely promised minority-owned small businesses easy access to guaranteed funding and economic COVID-19 relief.

Attorney General Ashley Moody said: “Defendants targeted minority-owned small businesses with the promise that they could help secure COVID-19 relief. Instead of securing the promised federal grant funds, the defendants collected fees from struggling businesses and left them in even worse financial shape. I’m glad we’ve put an end to this scam and will continue to litigate this case in an effort to recover lost funds for those harmed.

FTC Consumer Protection Bureau Director Samuel Levine said: “These scammers have targeted minority-owned businesses and misappropriated public funds intended to support honest businesses during the pandemic. Working with our state partners and with the new authority granted by Congress, we will continue to end the frauds preying on people during the pandemic.

The complaint alleges that Graham and his company C Lee Enterprises, LLC, doing business as Grant Bae, violated the FTC Act, the COVID-19 Consumer Shield Act and the Deceptive and Unfair Trade Practices Act of Florida targeting minority-owned small businesses with claims clients could access millions of dollars in grants after paying for defendants’ services.

According to the complaint, Graham and Grant Bae made false claims about the company’s services and Graham’s own grant writing history on Facebook, Instagram and in the Clubhouse audio app. The complaint alleges that Grant Bae only distributed money to a handful of social media influencers and close associates.

In an effort to convince minority-owned businesses that Graham could get grants, Graham allegedly misled consumers about almost every aspect of Grant Bae and lied about personal qualifications since at least October 2020. The complaint alleges that these deceptions , which cost small businesses thousands of dollars, include:

  • Falsely Promising Significant Returns: Grant Bae’s marketing included multiple misleading guarantees about how much companies would receive using its services. Grant Bae claimed that all minority-owned businesses were eligible for a grant of at least $25,000. He also falsely guaranteed returns based on the package purchased, including claiming that a company purchasing the $6,999 “Elite” package would receive at least $250,000 in grants and that all customers would receive at least four grants per month. first year.
  • Misleading clients about grant status: Defendants allegedly sent misleading messages to clients that grants had been “awarded” or were “pending.” Graham also made false promises in Instagram videos, claiming customers’ money would be deposited. According to the complaint, customers never received the money and often realized it too late to request chargebacks for funds prepaid to Grant Bae.
  • Misleading customers about access to grants: Grant Bae claimed in marketing that it had access to $268 million in grants to distribute to its customers, even though such funds did not exist. He also claimed to have secured grants from major nonprofit foundations and government agencies for his clients.
  • Lying about past success: Defendants’ marketing misled companies into believing that Grant Bae is a successful company and has provided tens of millions of dollars in grants. Graham also misleadingly claims eight years of experience developing the ‘gift’ of writing grants, but Graham’s last known job was in 2018 at a fast food restaurant, where she pleaded guilty to two chefs. theft charge for stealing the restaurant’s cash deposits.
  • Failing to provide promised refunds: Complaint alleges that although Grant Bae offers a “money back guarantee” to companies that have purchased the service, the company is often silent and blocks contact with customers who complain of losing money silver.

The complaint also alleges that Graham relied on funds acquired under the federal COVID-19 Paycheck Protection Program to start Grant Bae. A month after its inception, the company received approval for a Paycheck Protection Program loan. Later that summer, Graham was individually approved for another PPP loan as an independent contractor. At times, according to the complaint, Grant Bae said he would apply for COVID-19 Economic Injury Disaster Loans on behalf of clients.

The joint complaint is filed in the U.S. District Court for the Intermediate District of Florida.

To view the joint complaint, click on here.

To view the temporary restraining order, click here.

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