Phoenix cop Toni Richardson faces federal charges over alleged fraudulent $ 1.2 million PPP loan

A former Phoenix cop is accused of stealing $ 1,276,500 from a federal program to help struggling businesses survive the coronavirus pandemic.

Officer Toni Richardson spent the paycheck protection program money on personal expenses, according to a federal indictment filed Wednesday. Because PPP loans are forgivable, they are, in effect, grants for qualifying expenses such as employee payroll.

Richardson faces federal charges of conspiracy, bank fraud and money laundering. She was arrested on December 1 and resigned from the force shortly after, a police spokesperson said.

In February, while still in the Phoenix Police Force, Richardson and her business partner applied for a PPP loan for Glendale-based nonprofit The Lotto Club, according to the deed. charge.

The organization was owned by Richardson, the request asserted, and she was its president and CEO.

The Lotto Club had significant salary expenses: 85 employees and monthly labor costs of over $ 500,000, she said in her loan application.

The Lotto Club, according to documents filed with the state, was incorporated in 2015 as a “social club”. In 2021, an annual report classified it as a “veterans charity.”

But before the loan was issued, the association had no employees and was not engaged in any activity, according to the FBI.

According to federal prosecutors, the payroll provided by the organization was false. A bank account that was opened in the Lotto Club name after the organization received the loan had an initial balance of $ 0 and had no history of payroll processing.

“The defendants knew that the Lotto Club had no employees and that it paid no wages or payroll taxes to employees or independent contractors,” the indictment reads.

Richardson’s business partner, Blu Mitchell, pulled out a check for $ 200,000 in his name, along with a subsequent wire transfer of $ 25,000. Mitchell, it seems, runs several nonprofits in the Phoenix area, including Sigma CUTS, which pretends do a wide variety of philanthropic work across the United States

PPP loan fraud is very common. Law Firm Tracking Covid Rescue Fraud Cases Compiled hundreds of cases nationwide PPP loan fraud, including several cases in Arizona.

In March, a Mesa resident was charged with several counts of fraud when he allegedly fabricated documents to obtain a PPP loan and then bought a Porsche, court documents show.

Richardson joined the force in 2017, according to city salary data. She had worked before as an officer in Atlanta and California.

A spokesperson for the United States district attorney for Arizona said the office would not comment on an ongoing case.

Andrew Williams, a spokesperson for the Phoenix Police Department, said Phoenix New Times Thursday, which the department had not planned to investigate internally, given that Richardson had left the force.

“The City of Phoenix takes allegations of criminal conduct by our employees very seriously,” Williams said in a statement. “The alleged actions of this employee go against the core values โ€‹โ€‹of the city and everything we stand for as public servants.”

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