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At her first appearance in court on Friday morning after being indicted on COVID-era loan fraud, Charlotte City Council member Tiawana Brown appeared to be at peace.
She asked that she be allowed to travel throughout the country, an allowance U.S. Magistrate Judge Susan Rodriguez agreed to. Brown said that was to continue her work with her nonprofit, Beauty After the Bars, which works to help women after incarceration.
She then pleaded not guilty and requested a jury trial.
Afterward, she thanked the judge for her kindness, and then sat in the court while two of her adult children, Tijema Brown and Antoinette Rouse, were arraigned. She first sat with Antoinette while Tijema pleaded not guilty. She then sat with Tijema while Antoinette pleaded not guilty.
She left the courthouse with an initial “no comment” to reporters following behind her, though she later made a few comments in her defense.
While she was hesitant to talk Friday, that was not the case a day earlier.
At a news conference Thursday, she and her ally — activist Cedric Dean — cast the criminal charges as an overreach and politically motivated. They also raised the possibility that Brown was unfairly targeted because she is Black.
“Why are we here?” Brown asked, after saying she had paid back her portion of the $124,000 in questionable loans. She said that was a little under $21,000.
Brown added: “Justice don’t always love people who look like me.”
(On Charlotte Talks on Thursday, Assistant U.S. Attorney Russ Ferguson, who’s overseeing the case, said the investigation into Brown had started under his predecessor, Dena King. She was a Democratic appointee, and is a Black woman.)
On Thursday, Dean pointed to a similar case: The owner of Gaston County’s Hillbilly’s Barbeque and Steaks being allowed to pay $1.53 million in restitution for fraudulently receiving and spending pandemic funds. The owner didn’t face criminal charges.
“The other company (Hillbilly’s) is sitting over there … and to do an attack on this Black woman who paid it back,” Dean said. “That’s what we want, right? To pay it back!”
Dean added: “I’m asking the U.S. attorney to give her the same consideration as given to Hillbilly Barbeque.”
Brown’s attorney, Rob Heroy, chimed in, noting there have been a number of other civil settlements related to Payroll Protection Program fraud.
Criminal charges common
But the U.S. Attorney’s Office has also sought criminal charges against people alleged to have committed PPP fraud. In North Carolina’s Western District alone, prosecutors have charged 35 cases.
One example: In 2022, a Charlotte restaurant owner, Izzat Freitekh, was sentenced to four years in prison. His son, Tarik Freitekh, was sentenced to serve more than seven years.
According to WBTV, “evidence presented during a six-day trial in March showed the two obtained $1.7 million in fraudulent proceeds obtained by submitting multiple fraudulent PPP loan applications.”
The Charlotte Observer reported Friday on a Mooresville man “sentenced to serve nearly four years in prison on Thursday for running a $6.1 million investment fraud scheme and fraudulently obtaining more than $2.6 million in COVID relief funds.”
From Brown’s perspective, she and her two adult daughters are accused of obtaining fraudulent loans worth a relatively small amount — at least compared to the above cases.
And she said she paid her share of the loan proceeds back.
But she is also a member of the Charlotte City Council, whose alleged scheme occurred just three years before her election. Prosecutors sometimes hold public officials to higher standards.
Plus, Brown has been convicted of fraud before. She spent four years in a federal prison on those charges in the 1990s. Her redemption story has been a key part of her political message and identity. Federal prosecutors can look more harshly at people they think are repeat offenders.
And while the amount of money was relatively small, the indictment alleges Brown and her daughters weren’t entitled to any of it.
It wasn’t just a case of misusing the loan proceeds on an elaborate birthday party.
It was that the three allegedly created an elaborate scheme to secure the loans, creating fake tax forms and applying multiple times over more than a year, even after some of their attempts were turned down.
Elections coming
In her news conference, Brown said she would not step down. That’s different from Patrick Cannon, the former Charlotte mayor charged with accepting bribes in 2014. He stepped down the same day he was charged. (Though it’s worth noting that his charges related directly to his conduct as mayor.)
Brown also said she would run for reelection.
“Why would I resign? I haven’t been convicted of anything,” she said. “I was elected for the people by the people. The people would have to remove me out of the seat.”
If she pleads not guilty, it’s likely the upcoming elections would happen before a jury could render a verdict.
Filing for this year’s municipal elections begins July 7. The Democratic primary is Sept. 9.
Should Brown win the primary, she would easily be the favorite in the November general election since District 3 is overwhelmingly Democratic.
A Brown reelection campaign would be a stress test for Charlotte’s reputation for good government, which is already a bit shaky.
Cannon tried a comeback run for an at-large City Council seat in 2022. But that was after finishing his sentence.
He received the endorsement of the Black Political Caucus. But needing a top-four finish in the party primary, he finished sixth.
While Brown is defiant today, that could quickly change facing the prospect of a long sentence
As a public official with a prior fraud conviction, prosecutors could be motivated to make her an example.
