Clayton Man Pleads Guilty to COVID-19 Assistance Fraud, Aggravated Identity Theft, and Illegal Firearm

WILMINGTON, N.C. – Darnell William King, age 42, pled guilty today to conspiracy to commit bank and wire fraud, aggravated identity theft, and possession of a firearm by a convicted felon.  According to the indictment and information presented in court, King entered into separate conspiracies to commit Paycheck Protection Program (PPP) fraud and to use stolen identities to obtain personal lines of credit from various private lenders in the Eastern District of North Carolina.

“The Paycheck Protection Program was an essential tool used to support the economy against an unforeseen international health crisis and provide much needed relief for small businesses,” Acting United States Attorney Daniel P. Bubar stated today.  “Instead, King saw the PPP as an opportunity to commit serious fraud, and is being held responsible for his crimes because of the good work of IRS-CI and our other federal and state partners.”

“The defendant caused immeasurable hardship to innocent victims and businesses by stealing identities and using them to borrow money he never intended to repay,” said Special Agent in Charge Donald “Trey” Eakins, Charlotte Field Office, Internal Revenue Service Criminal Investigation. “IRS Criminal Investigation, along with our law enforcement partners and the United States Attorney's Office, remain vigilant in finding, investigating and prosecuting those individuals who seek to willfully defraud the United States Treasury and blatantly disregard the victims of their schemes.”

According to the indictment, King and others recruited “mules” to obtain fraudulent personal loans.  King created fake driver’s licenses and other identity documents using a true photo of the mule and stolen personally identifying information belonging to unknowing victims.   The mules then used the fake identity documents and other forged business records to obtain personal loans based on applications for credit that King or others had previously submitted online.  The mule would then deliver the loan proceeds to King or his co-conspirators and would receive kickbacks anywhere between $100 and $2,000.  In a second conspiracy, King and other conspirators applied for a PPP loan in King’s name with falsified bank and tax records claiming that King had been working as an Uber driver before the pandemic, resulting in the disbursement of over $15,000 in funds guaranteed by the Small Business Administration.  Finally, during the execution of a search warrant in Clayton seeking evidence related to the identity theft conspiracy, law enforcement discovered King in possession of a firearm with a high-capacity drum magazine, even though King is a previously convicted felon prohibited  from possessing firearms.

“This extensive investigation, known as Operation Overload, uncovered a sophisticated criminal enterprise that fraudulently utilized thousands of North Carolina driver licenses, resulting in financial crimes that impacted individuals across multiple states,” said Captain Vaughn of the North Carolina DMV License & Theft Bureau.  “Bureau commends its inspectors, intelligence analysts, and all partner agencies for their hard work and collaboration. Their efforts underscore the importance of interagency cooperation in combating complex fraud schemes and safeguarding the identities of North Carolina residents.”

Sentencing will occur later this year before United States District Judge Richard E. Myers, II.

Daniel P. Bubar, Acting U.S. Attorney for the Eastern District of North Carolina made the announcement after Chief U.S. District Judge Richard E. Myers II accepted the plea.  Internal Revenue Service Criminal Investigation is leading the investigation with the assistance of Homeland Security Investigations; the Wake County Sheriff’s Office; the Bureau of Alcohol, Tobacco, Firearms and Explosives; and the North Carolina Department of Motor Vehicles License & Theft Bureau.  The Clayton Police Department and other local agencies have also aided over the course of the investigation. Assistant U.S. Attorney David G. Beraka and Assistant U.S. Attorney Ashley H. Foxx prosecuted the case.

Related court documents and information can be found on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No. 5-24-CR-00156.

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