PPP Fraud: Former Phoenix Police Officer Indicted

Caitlin Sievers
Updated ·2 min read

PHOENIX, AZ — A former Phoenix Police officer is accused of applying for and receiving more than $1.2 million from the federal Payroll Protection Program, for a company that had no employees or payroll, according to a grand jury indictment.

Toni Richardson was indicted by a grand jury on suspicion of conspiracy, bank fraud and money laundering in United States District Court for the state of Arizona on Nov. 23, according to court documents. Richardson was ordered to be released without bond on Dec. 2, according to court documents.

Willie "Blu" Mitchell is listed as a co-defendent in the case.

Phoenix Police announced Wednesday that the department began the process of firing Richardson when it learned of the charges, but Richardson resigned before she was terminated.

Richardson and Mitchell are accused of submitting an application through Western State Bank for relief through the Payroll Protection Plan, for a business called The Lotto Club.

Federal prosecutors say that the two received more than $1.2 million in government-guaranteed loans through the PPP and used them for personal expenses, while disguising them as business expenses. The PPP was meant to help businesses struggling to pay employees during the COVID-19 pandemic.

In the application for the PPP, submitted in February, Mitchell and Richardson claimed The Lotto Club had 85 employees and an average monthly payroll of more than $500,000, prosecutors said in the indictment. But the club actually had zero employees and no payroll, according to prosecutors.

Prosecutors claim that The Lotto Club only began making transactions through a payroll provider after it received the PPP loan.

PPP loan forgiveness requires that 60 percent of the loan be used for payroll. The Lotto Club issued payroll for the first time in March 2021, prosecutors say.

"The city of Phoenix takes allegations of criminal conduct by our employees very seriously," Phoenix Police said in a statement. "The alleged actions of this employee go against the core values of the city and everything we stand for as public servants."

This article originally appeared on the Phoenix Patch