CHRISTIANSTED — Prosecutors allege that the co-owners of St. Croix-based Island Services Group used emergency federal financial assistance meant to help American businesses impacted by COVID-19 for personal enrichment, according to documents unsealed in the U.S. District Court of the Virgin Islands on Thursday.
Florida-resident Kimberly McCollum and St. Croix-resident Morris Anselmi are being indicted for conspiracy to commit wire fraud, wire fraud, mail fraud and making false statements to the U.S. Small Business Administration and a financial institution.
A LinkedIn online profile lists McCollum as “owner and engineer” of the company, and also lists a nine-year membership with the St. Croix Chamber of Commerce, including two years as president.
ACCUSED OF $500,000 PPP FRAUD: Kimberly McCollum of St. Croix
In March 2020, the U.S. Congress passed a $2.2 trillion stimulus bill to stanch the economic impact of the COVID-19 pandemic. Then-President Donald Trump signed the Coronavirus Aid, Relief, and Economic Security Act — or CARES — into law on March 27 of that year.
That act authorized up to $849 billion in forgivable loans to small businesses to support job retention and other expenses through the Paycheck Protection Program. Congress authorized $300 billion more in PPP funding in April 2020.
Businesses seeking PPP loans were required to submit an application stating how the funds were to be used.
According to the grand jury indictment, Anselmi submitted an application in June 2020, and Island Services Group received $494,700 in PPP loans.
The following month, $200,000 were transferred out of the company’s account and into McCollum’s personal United Fidelity Bank account. Less than a week later, on July 21, those funds were transferred again into McCollum’s personal Bank of America Account.
Island Services Group received a second tranche of PPP loans — also in the amount of $494,700 — in March 2021. The following day, $300,000 were transferred to McCollum’s United Fidelity account. In April, McCollum transferred $200,000 from that account to Bank of America, and then subsequently purchased a $200,000 annuity for herself from Jackson National Life.
Prosecutors allege that the company would not have been able to transfer half a million dollars into McCollum’s personal bank account were it not for the PPP loans.
Kimberly McCollum, co-owner of Island Services Group, appeared before U.S. Magistrate Judge Emile Henderson, III, for an initial appearance hearing after being charged with theft of $500,000.00 in Coronavirus Relief Funds. McCollum was released after posting a $500,000.00 bond.
Further, McCollum applied for loan forgiveness on the first draw, and Anselmi submitted an application for forgiveness on the second. The second application claimed that Island Services Group spend $369,727.44 in “covered operational expenditures.”
McCollum was scheduled to turn herself in on Wednesday, and Anselmi has been hospitalized in Texas with a serious medical ailment, according to court documents.
The documents did not specify which jurisdiction McCollum was scheduled to turn herself in on Wednesday, and the Virgin Islands Free Press was unable to immediately ascertain whether she did.
This case is being investigated by the Federal Bureau of Investigation (FBI). It is being prosecuted by Assistant U.S. Attorney Evan Rikhye.
U.S. Attorney Delia L. Smith said that an indictment is merely an allegation in a charging document and that all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.