A Zebulon woman was sentenced Thursday to eight years in prison for her role in a multimillion-dollar COVID-19 fraud scheme.
Loretta Clarice James, 49, had previously pled guilty to conspiracy to commit wire fraud on May 29, 2024.
One of James’ co-conspirators, Lakesha Bowles, 43, was sentenced on April 24, 2025, to 30 months’ imprisonment for her role in the conspiracy.
Both women were also ordered to repay over one million dollars in restitution.
According to court documents and other information presented in court, James and Bowles conspired to commit wire fraud by fraudulently submitting loan applications to the federal Paycheck Protection Program(PPP), which was established by Congress through the CARES Act to support small businesses during the economic uncertainty and layoffs that accompanied the COVID-19 pandemic.
The fraudulent claims on the PPP loan applications, guaranteed by the United States Small Business Association, inflated payroll numbers and asked for funding on behalf of dormant or non-existent businesses.
James and Bowles submitted loan applications in their own names and on behalf of others whom they recruited. James and Bowles were given a portion of the loan proceeds if the third-party loans were approved.
In addition to PPP fraud, James also conspired to commit wire fraud by fraudulently submitting loan and grant applications to the Economic Injury Disaster Loan (EIDL) Program and the Restaurant Revitalisation Fund (RRF) Program.
These other programs were also created by the federal government as a lifeline to struggling small businesses affected by COVID-19.
James submitted fraudulent EIDL loan applications in her name, her family members’ names, and in the names of other friends and associates.
James submitted EIDL applications for businesses that did not exist and for salaries of employees who were fictitious. James submitted several hundred fraudulent EIDL applications, leading to over $500,000 in fraudulent EIDL disbursements.
In all, James, Bowles and other co-conspirators facilitated the fraudulent disbursement of more than $1.5 million in COVID-19 Loans.
Darnell William King, who conspired with both women, pleaded guilty to PPP fraud and identity theft charges on March 11, 2025.
In addition to this significant COVID-19 loan fraud conspiracy, Loretta James was involved in an identity theft scheme where she and others used stolen identities to obtain loans or personal lines of credit from private lenders.
James’ main role in that scheme included obtaining Social Security Numbers of individuals with good credit, completing a loan application in that individual’s name, using forged documents and email accounts in furtherance of the loan applications.
James and her conspirators then hired “Mules” to physically obtain the funds from the bank or lender.
Equipped with fake identity documentation made by James or others, the Mule would physically sign the application and associated paperwork, claiming to be the true applicant and promising to pay the loan back.
After securing the funds, the Mule would bring the money back to James and other members of the scheme, and they would give the Mule a cut of the loan, ranging from $100 to $2,000 per loan.
James and her compatriots did this over and over again, with loans that ranged from $5,000 to $10,000, none of which was ever paid back.
