ST. LOUIS — Two men involved in a St. Louis timeshare exit business were charged in federal court Wednesday with securing $2.8 million in fraudulent COVID-19 relief loans through the Paycheck Protection Program.
A grand jury indicted Christopher Lee Carroll and George Reed, of Square One Development Group, Wednesday on three counts of bank fraud and six counts of money laundering.
Square One advertises helping people exit timeshare contracts, according to its website.
Federal prosecutors alleged Wednesday that the men applied for two Paycheck Protection Program, or PPP, loans — one for more than $1.2 million and the other for more than $1.6 million. Under the program, the loans meant to support small businesses through the pandemic could be forgiven by the federal government under certain conditions.
In their application, the men claimed the funds would be spent on covering employee wages, but they instead suspended employees’ pay and health insurance coverage, according to a press release from the U.S. Attorney’s Office for the Eastern District of Missouri.
The men then used some funds to start a trucking company and paid themselves $660,000, prosecutors allege.
Reed and Carroll submitted PPP loan applications in their spouses’ names in part to conceal Carroll’s status as a paroled felon, according to the release.
Both Reed and Carroll are listed on the sex offender registry. Reed was sentenced to five years in prison on charges of possession of child pornography and sexual misconduct or attempted misconduct with a child, registry and court records show. Carroll was sentenced in 1995 to 30 years in prison for forcible sodomy.
In July 2020, the Better Business Bureau of Eastern and Southwest Missouri and Southern Illinois released a warning about Square One after receiving more than 30 complaints alleging the company used misleading sales presentations, failed to honor contracts, did not issue refunds and provided poor customer service.
Customers quoted in the release claimed they hired the company to negotiate them out of timeshare contracts, but the company never did the work it promised.
UPDATED Sept. 30 with information from Missouri's sex offender registry.