Mans pleads not guilty in Paycheck Protection Program fraud case

Texarkana Federal Courthouse

A Maud, Texas, man accused of a multi-million scheme to defraud the government’s pandemic related Paycheck Protection Program pleaded not guilty Wednesday to two counts of mail fraud before a federal judge in Texarkana.

Samuel Morgan Yates, 32, allegedly created false tax documents to apply for loans. He allegedly received more than $500,000 in funds deposited to an account at a Texarkana bank.

Yates appeared with attorney Jeff Harrelson of Texarkana before U.S. Magistrate Judge Caroline Craven on Wednesday morning in the Texarkana Division of the Eastern District of Texas. He has been free on a $10,000 unsecured appearance bond since his arrest last year.

Yates allegedly claimed he was eligible for the funding because he operated a business with employees.

“Lone Star Tuning was a sole proprietorship located in Maud, Texas. Defendant Samuel Morgan Yates was the 100% owner of Lone Star Tuning, and its business address was located at his residence. Lone Star Tuning had no operations prior to January 2020 and generated no revenue,” the indictment states.

Yates could be sentenced to up to 20 years in prison and fined up to $250,000 on each count. His case is scheduled for jury selection March 22.

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