Wendell Smallwood Jr., a former NFL running back for the Philadelphia Eagles and a native of Wilmington, has been charged with fraud related to COVID-19 relief programs, according to court documents.
Federal prosecutors allege Smallwood provided fraudulent information to government agencies to receive tens of thousands of dollars in payments related to companies he controlled. They also allege that he and others were involved in a kickback conspiracy aimed at defrauding COVID-19 relief funds and lied to tax authorities, according to a criminal complaint filed by prosecutors in the District of Delaware.
He is charged with three felonies: wire fraud, conspiracy to commit wire fraud and conspiracy to defraud the Internal Revenue Service. The charge carries a maximum penalty of 50 years in prison, although defendants without a criminal conviction, like Smallwood, rarely receive such a harsh sentence if found guilty.
Smallwood has not yet been charged and has not yet entered a plea in the case. A hearing on this will take place in December.
“Wendell has fully cooperated with this investigation. We will have more to say when we appear in December,” said Mark B. Sheppard, a Philadelphia-area attorney representing Smallwood.
The case was brought by prosecutors led by David Weiss, the U.S. Attorney for the District of Delaware. Kim Reeves, a spokesperson for Weiss, declined to comment on the case.
From 2016: Delaware native Wendell Smallwood: 'Football saved my life'
Smallwood played high school football at Red Lion Christian Academy in Bear. He was drafted by the Philadelphia Eagles in 2016 and played five seasons in the league with three different teams through 2020.
What the FBI alleges in the charging documents
In 2020, as the COVID-19 pandemic raged, the federal government approved several trillion-dollar relief programs aimed at helping small businesses and households weather the economic shutdown caused by the health crisis.
One of those programs was the Economic Injury Disaster Loan program, which offered low-interest loans to small businesses to cover specific expenses.
Federal prosecutors allege Smallwood enrolled in that program using “defunct or recently registered companies” and provided fraudulent information about the companies' activities from May 2020 to June 2021.
Wendell Smallwood presented a $15,000 check to Wilmington's Parks and Recreation in 2019 to help build a scoreboard at the newly renovated Eden Park soccer field.
Under that scheme, prosecutors allege he received $46,000, which they describe as “fraudulent” loan proceeds. The complaint states that the money was not spent on business expenses and was partially withdrawn as cash from ATMs in Delaware and surrounding states, according to the indictment.
Prosecutors also accuse him of providing false information to the Paycheck Protection Program, another COVID-era relief program that offered forgivable loans to cover business expenses such as payroll, rent and utilities. The program supported both small businesses and businesses owned and operated by one person, known as a sole proprietorship.
Editor's note: Read a copy of the indictment at the end of this story.
The criminal complaint states that Smallwood conspired with another unnamed individual to file fraudulent applications in the names of thirteen separate sole proprietorships. The applications falsely stated the company's existence or inflated the company's operations and generated $269,000 in revenue, according to the complaint.
Smallwood and the unnamed conspirator arranged kickbacks from the sole proprietorships that received the loan proceeds, prosecutors allege. According to prosecutors, he received personal kickbacks ranging from $4,000 to $12,000.
He is also accused of a tax fraud conspiracy, with prosecutors alleging that he recruited tax filers in Delaware and elsewhere and prepared tax documents that contained lies about things like income. According to prosecutors, the IRS issued approximately $110,000 in tax refunds in connection with these applications.
The criminal complaint against Smallwood was signed by prosecutors on October 28. It is unclear when the indictment was unsealed and placed on the court's public docket.
One of thousands of COVID fraud cases
Smallwood's case is not unique and minor compared to the scale of other COVID fraud allegations.
Federal prosecutors have alleged COVID-19 fraud against unsophisticated scammers, a highly organized group of dozens, as well as doctors, medical manufacturers, a reality TV star and a person who wanted a pricey Pokémon card.
Locally, a former University of Delaware student was accused of fraudulently receiving approximately $1.4 million in COVID loans for sham businesses.
In April, the Justice Department's COVID-19 Enforcement Task Force reported that authorities overseeing COVID fraud had charged more than 3,500 people with federal crimes, recovered more than $1.4 billion in stolen pandemic funds, and more than 400 civil settlements and judgments.
In June 2023, the Office of the Inspector General for the Small Business Administration – the agency responsible for administering the programs in Smallwood's case – estimated that it had disbursed more than $200 billion in potentially fraudulent loans and advances in various COVID-era programs.
The report estimated that about 17 percent of the $1.2 trillion from the two programs linked to Smallwood's case went to “potentially fraudulent actors.”
Contact Xerxes Wilson at (302) 324-2787 or [email protected].
Criminal complaint by Xerxes Wilson on Scribd
This article originally appeared in Delaware News Journal: Former Eagles running back, Delaware native charged with COVID fraud
