Madinah Malikah Montgomery, 33, from Oklahoma City, has been sentenced to 24 months in federal prison for her role in a wire fraud scheme. She has also been ordered to repay $300,000 in restitution to the United States government. The announcement was made by U.S. Attorney Robert J. Troester.
Background of the Case
Expansion of the EIDL Program
In response to the COVID-19 pandemic, the Small Business Administration (SBA) expanded its Economic Injury Disaster Loan (EIDL) program, offering financial assistance to struggling small businesses and other qualifying entities. This initiative aimed to alleviate economic hardship caused by the pandemic.
Fraudulent Loan Application
According to court records:
- On July 16, 2020, Montgomery submitted an application for a $150,000 EIDL loan, falsely claiming to own a salon with 10 employees and an annual gross revenue of $600,000.
- The SBA approved her loan and deposited $149,900 into her bank account in Enid, Oklahoma.
- Montgomery admitted to misusing some of the funds for personal expenses.
Legal Proceedings
Guilty Plea and Sentencing
- On April 3, 2024, Montgomery pleaded guilty to filing a fraudulent loan application.
- At her November 22, 2024 sentencing, prosecutors revealed that Montgomery had fraudulently applied for three EIDL loans over three months, totaling $385,000, of which she received $300,000.
- U.S. District Judge Stephen P. Friot sentenced Montgomery to 24 months in federal prison, followed by three years of supervised release.
Key Considerations in Sentencing
Judge Friot emphasized:
- The seriousness of the offense, as Montgomery exploited funds meant to support businesses impacted by the pandemic.
- Montgomery’s criminal history, which includes multiple felony convictions.
- Her history of repeated offenses, suggesting previous punishments failed to deter her criminal behavior.
Montgomery’s Criminal History
Public records reveal prior felony convictions:
| Offense | Court Case Number | Jurisdiction |
|---|---|---|
| Possession of marijuana with intent to distribute; drug paraphernalia possession | CF-2009-03754 | Oklahoma County |
| Grand larceny | CF-2014-4967 | Oklahoma County |
| Bringing contraband into a penal institution; conspiracy; possession of a controlled substance with intent to distribute | CF-2022-00142 | Beckham County |
Ongoing Federal Case
In an unrelated matter, Montgomery faces a federal charge for possession of fentanyl with intent to distribute (case number 24-CR-348). She has pleaded not guilty and is awaiting trial. It is important to note that charges in this case remain allegations, and she is presumed innocent unless proven guilty.
Investigative Efforts
This case was investigated by:
- United States Secret Service
- Social Security Administration’s Office of Inspector General
- Oklahoma City Police Department
- IRS – Criminal Investigations
COVID-19 Fraud Task Force
The Western District of Oklahoma Coronavirus Fraud Task Force also played a crucial role. This task force:
- Focuses on fraud related to programs funded by the CARES Act and the American Rescue Plan Act (ARPA).
- Investigates misuse of programs such as the Paycheck Protection Program (PPP), EIDL, unemployment insurance, and pandemic-related supply fraud.
FAQs
What was Madinah Malikah Montgomery convicted of?
Montgomery was convicted of wire fraud for submitting fraudulent EIDL loan applications.
How much restitution was Montgomery ordered to pay?
She was ordered to repay $300,000 to the United States government.
What is the Economic Injury Disaster Loan (EIDL) program?
The EIDL program provides financial assistance to small businesses and entities impacted by economic crises, such as the COVID-19 pandemic.
