Tiffany Dawn Russell, North Carolina was sentenced to 63 months today for her role in an extensive multi-year fraud conspiracy and was sentenced to 36 months for filing a false tax return.
Russell was originally indicted in November 2020 for conspiracy to commit bank fraud, bank fraud, access device fraud, and misuse of a social security number. According to the Indictment, Russell and her co-conspirators applied for loans and credit cards with social security numbers that were not issued to them by the Social Security Administration. By doing so, they created new credit profiles or synthetic identities for themselves to open financial accounts and make purchases from retailers without any intention of paying for the items and services obtained. Russell was charged with using a synthetic identity to purchase a BMW and to obtain a credit card which she used to pay for her 2016 butt augmentation surgery.
Russell also provided fabricated documents when applying for mortgages to purchase three properties, including an oceanfront residence in Nags Head, North Carolina. Russell gave doctored bank statements and inflated pay stubs to make it appear she had substantial liquid assets and the ability to pay the loans.
In addition to using synthetic identities, Russell also embarked on a scheme of credit washing to remove legitimate debt accounts from her credit history by falsely claiming she was the victim of identity theft and had not opened those accounts. Once the credit reporting agencies removed those accounts, her credit score improved, enabling her to obtain credit.
Finally, between March 30, 2020 and June 29, 2020, Russell and others fraudulently obtained more than $1 million in loans under the CARES Act, which was enacted by Congress to provide emergency financial assistance to millions of Americans suffering from the COVID-19 pandemic. The ten loan applications, including two for her law firm, contained false representations relating to the number of employees, monthly payroll, revenue, and expenses.
Russell used these illegally-obtained proceeds to make the down payment on her Nags Head property and purchase five other properties in North Carolina, Maryland and Alabama. Russell also used these ill-gotten gains to pay outstanding personal debt, unrelated to any business entity.
These sentences will be served concurrently. Earlier this year, Russell pled guilty to charges relating to her efforts to obtain more than $2.5 million from at least 12 financial institutions and the United States Small Business Administration. In addition to her prison sentences, Russell was ordered to forfeit more than $2 million in fraud proceeds.
Michael Easley, U.S. Attorney for the Eastern District of North Carolina made the announcement after sentencing by U.S. District Judge James C. Dever III. The Federal Bureau of Investigation and the Internal Revenue Service investigated the case and Assistant U.S. Attorney Susan B. Menzer was the prosecutor.
“This defendant spent years defrauding banks and the federal government, and now she’ll be spending years behind bars,” said U.S. Attorney Michael Easley. “As Judge Dever noted at sentencing, this was more than a one-off mistake, it was a multitude of bad decisions by an attorney who knew better. This fraud scheme is even more egregious because the defendant falsely obtained more than $1 million in COVID-relief funds intended to help legitimate, hard-working business owners weather the pandemic. Money intended to keep businesses afloat was instead used to purchase beach homes and support the defendant’s personal interests. I commend the many law enforcement partners on our EDNC Covid Fraud Task Force who helped to ensure that attorney Tiffany Russell faced justice.”
On May 17, 2021, the United States Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. The Eastern District of North Carolina’s COVID Task Force is a part of this effort to coordinate fraud-related investigations and prosecutions in Eastern North Carolina. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Related court documents and information can be found on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No. 5:20-cr-00505-D-3.