The Owner of Luxury Baby Boutique Convicted for $500K Pandemic Loan Fraud

A former Colorado resident and business owner, Shambrica Washington, has been convicted of defrauding U.S. pandemic relief programs of nearly $500,000. Washington, who now resides in Parker, Texas, was found guilty of 31 criminal counts, including wire and bank fraud, money laundering, and making false claims. Her scheme exploited two critical COVID-19 relief efforts: the Economic Injury Disaster Loan (EIDL) and the Paycheck Protection Program (PPP) program, both designed to help struggling businesses during the pandemic.

Fraudulent Loans for Personal Luxury

Between March and July 2020, Washington secured $485,749 in loans under the guise of two businesses, one of which was Tiny Toes and Tiaras, an online luxury baby boutique. The other was Truelove’s Daughters Inc., a nonprofit purportedly focused on mentorship. Washington misrepresented both businesses’ operations, including their number of employees, wages, and revenue. She then diverted the funds for personal use, including purchasing a custom-built home, a car, elective surgery, and settling credit card debt.

Washington’s misuse of these pandemic relief funds starkly contrasts the programs’ intended purpose. The CARES Act and its associated relief efforts were meant to aid workers and businesses impacted by COVID-19. Instead, Washington used the funds for lavish purchases while many legitimate businesses struggled to stay afloat.

Further Fraudulent Attempts

Washington’s fraudulent actions did not stop with her initial loans. She attempted to gain millions more through additional loans and grants, including applying for $6 million from a Small Business Administration program to support shuttered concert venues. Her fraudulent applications also included claims for advance tax credits from the Internal Revenue Service. These further attempts to defraud pandemic relief efforts highlight the scale of her deception.

Investigation and Conviction

The fraudulent activities were uncovered through an investigation led by the IRS Criminal Investigation and the FBI Denver Field Office. Their efforts revealed the extent of Washington’s exploitation of pandemic relief programs. Her trial was presided over by United States District Court Judge William J. Martinez, with prosecution handled by Assistant U.S. Attorneys Craig Fansler and Taylor Glogiewicz. The investigation was part of broader efforts by the COVID-19 Fraud Enforcement Task Force, established in May 2021, to combat pandemic-related financial fraud.

Washington’s sentencing is scheduled for Sept. 26, 2024, where she could face severe penalties for defrauding U.S. taxpayers. Her case reminds us of the ongoing efforts to hold accountable those who took advantage of programs meant to provide relief during a time of national crisis.

Shambrica Washington’s conviction underscores the government’s commitment to pursuing individuals who defrauded pandemic relief programs. While the funds were meant to support those struggling due to the COVID-19 pandemic, Washington exploited the system for personal gain, diverting taxpayer money into luxury purchases. Her case is part of a broader crackdown on pandemic-related fraud, with law enforcement agencies working diligently to hold such offenders accountable.

References: Owner of Online Luxury Baby Boutique Found Guilty of 31 Counts of Defrauding COVID-19 Relief | Online boutique owner found guilty of nearly $500K in COVID-19 relief fraud