Photo courtesy of Fox 13 Memphis.
Fox News Phoenix reported that a former Phoenix police officer was arrested for stealing nearly $1.3 million in grant money that was initially given to struggling businesses to stay afloat during the pandemic.
According to a federal indictment filed on Wednesday, Officer Toni Richardson spent paycheck protection program (PPP) funds on personal expenses. While PPP loans are forgivable, they are considered grants are given to qualifying business owners to pay for expenses, including payroll.
The indictment also stated that Richardson was currently working for the Phoenix police department when she and business partner Willie Mitchell submitted a PPP loan application for a Glendale-based nonprofit, The Lotto Club, in February.
The loan paperwork confirmed that Richardson was the president and CEO of the nonprofit business, which was listed as a “charity for veterans.” However, in May 2015, the company was filed as a “social club” according to online Arizona Corporation Commission records, AZ Central reported.
While the club had no employees or payroll, the indictment stated Richardson claimed false reports on her loan application, declaring 85 employees and an average monthly payroll ledger totaling over $500,000 in February 2021.
Federal prosecutors concluded that the payroll ledger the organization provided was fake. A bank account opened in The Lotto Club’s name after the organization received the loan, had an original balance of $0, and had no history of processing payroll.
“Defendants knew The Lotto Club had zero employees and that it paid no salaries or payroll taxes to any employees or independent contractors,” the indictment said.
Richardson was arrested by the FBI on Dec. 1 and resigned from the force shortly after that. She faces federal charges of conspiracy, bank fraud, and money laundering.
She pleaded not guilty on all counts. A court date has been set for Feb. 1, 2022, at 9 a.m. before Chief Judge Snow and a jury. Richardson was ordered to be released on her own recognizance based on the conditions of her release.
Andy Williams, a spokesperson for the Phoenix Police, said the department immediately terminated Richardson once they were notified of her arrest and received a letter of resignation from Richardson before formal termination.
“The department was notified of the circumstances surrounding the arrest and immediately began the process to terminate employment. The employee submitted a letter of resignation prior to formal termination. The city of Phoenix takes allegations of criminal conduct by our employees very seriously. The alleged actions of this employee go against the core values of the city and everything we stand for as public servants.”