On Thursday, U.S. Attorney for the Western District of North Carolina Russ Ferguson announced that Charlotte City Council member Tiawana Brown faces federal indictments on charges of wire fraud and conspiracy to commit wire fraud, stemming from allegedly fraudulent loan applications for COVID relief funds.
According to the indictment, Brown, 53, and her daughters, Tijema Brown, 30, and Antionette Rouse, 33, submitted multiple false loan applications and received more than $124,000 worth of Paycheck Protection Program, or PPP, loans. The loans — designed to be forgiven — were instituted during the pandemic to protect small businesses from laying people off as the economy faltered. The loans could only be used for business purposes, but the U.S. Attorney said Brown used the money for personal expenses, including luxury goods and a $15,000 birthday party.
Brown denied the charges and said she paid back the portion of loans she was responsible for — more than $20,000. She said she will not resign from City Council and plans to seek reelection. Brown was first elected to City Council in 2022, becoming the first formerly incarcerated member elected to the council. In the 1990s, she served several years in a federal prison in West Virginia on fraud charges.
Here’s what the indictment says about the loan applications submitted by Brown and her daughters — and how the money was used:
- The charges go back to 2020. That's when the indictment says Brown and her daughters started applying for disaster relief loans stemming from the COVID pandemic, which were overseen by the Small Business Administration and commercial lenders. From April 2020 to September 2021, the indictment says, Brown and her daughters made multiple applications for PPP and other relief loans.
- The indictment details several of the loan applications. On June 25, 2020, Brown submitted a loan application for a "personal services" company under an emergency relief program called Emergency Injury Disaster Loans, or EIDL. She said the business had 11 employees and gross revenue of $14,300 in 2019. Just 13 minutes later, the indictment says, Tijema Brown submitted an application for a business with the same number of employees, revenue and address, but claiming to be a different business. The government says her claims were false. The Small Business Administration wired a $10,000 advance to her five days later.
- The next day, June 26, 2020, Antionette Rouse submitted another application for another business with the same address and other similar data. On June 30, the SBA wired Rouse a $10,000 advance on a loan, though the application was denied two days later.
- On Aug. 17, the Tijema Brown applied for another EIDL loan that was rejected. This one was for an "entertainment services" company with two employees and $15,500 in revenue. On Aug. 31, 2020, the indictment says that another application was submitted in the name of La'Stephanie Brown, using Tijema Brown's Social Security number and Tiawana Brown's phone number. La'Stephanie is Tijema Brown's middle name. The application said the business was a "health services" company with five employees and $134,000 in revenue, at the same address as the prior applications. The SBA rejected the application.
- A day later, on Sept. 1, 2020, Tiawana Brown submitted another EIDL application for a "health services" company with eight employees and $142,000 in revenue. The indictment says that was false, and the application was rejected.
- In April 2021, the indictment says Tijema Brown filed two PPP loan applications for a company called "Givin Looks by Jema." She used fake IRS forms to substantiate that the business had $106,600 in revenue and $96,250 in profits, the indictment says. This resulted in two payments of $20,833 each being wired to her, which Tijema Brown said she used for payroll.
- The same month, her sister, Antionette Rouse, submitted a PPP loan application that was mostly identical, except for the business's identity. The indictment says she used the same fake IRS forms. Rouse also received a payment of $20,833 for payroll and other expenses. She did the same in May, the indictment says, and received another $20,833.
- On April 26, 2021, Tiawana Brown and Tijema Brown applied for a PPP loan for the business TC Collection. Social media shows that it was a swimwear company she started around the same time. She also claimed $106,600 in revenue and $96,250 in profits, the indictment says. The application used what the indictment says was the same fraudulent IRS forms.
- As a result, a lender wired $20,833 to a bank account controlled by Brown's nonprofit, Beauty After the Bars, which focuses on helping women leaving incarceration. A month after receiving that payment, the indictment says Brown spent $15,000 on a birthday party for herself, paid for from the Beauty After the Bars account. The expenses included "$3,500 for a venue, $5,000 in catering, $2,300 for photography and video, a balloon arch, a rose wall, a rented throne and a horse-drawn carriage."
- Beauty After the Bars social media posts from this time that were still available as of Thursday show Brown stepping out of a carriage, dancing at her 50th birthday party at the Gantt Museum, and sitting on a throne under a balloon arch.
- The indictment says other improper purchases made with the money included luxury goods such as Luis Vuitton merchandise.
