Former Philadelphia Eagles running back Wendell Smallwood Jr. allegedly committed fraud to obtain tens of thousands of dollars from two COVID-19 relief programs and ran a kickback scheme with several others to falsify loan applications and tax documents during the pandemic, federal prosecutors in Delaware said Thursday.
Smallwood, 30, faces multiple charges for crimes that allegedly occurred in 2020 and 2021, the final two seasons of his six-year NFL career. The Wilmington area native was living in Mullica, New Jersey, at the time of the alleged fraud, prosecutors said.
Federal investigators said Smallwood defrauded the Economic Injury Disaster Loan (EIDL) program and the Paycheck Protection Program (PPP). EIDL was administered by the Small Business Administration and provided low-interest loans to businesses, renters and homeowners experiencing financial disruptions. The PPP offered loans to cover payroll and other expenses, including for entities owned by sole proprietors.
Smallwood allegedly submitted EIDL applications for "defunct or recently registered businesses," misrepresenting their financial status and other aspects of their operations. During the period under investigation, he received $46,000 in fraudulent loans that were withdrawn for personal use instead being invested in his businesses, prosecutors said.
Charging documents obtained by the News Journal in Delaware allege Smallwood also defrauded the PPP by conspiring with another unnamed person to obtain loans totaling about $269,000. Fraudulent applications were submitted for at least 13 sole proprietors using fabricated business information and inflated revenue figures, prosecutors said. The conspiracy was part of a kickback scheme that dispersed loan proceeds to the sole proprietors who participated, prosecutors said.
Smallwood allegedly received multiple kickbacks from PPP loans that each ranged from $4,000 to $12,000.
In addition to defrauding the relief programs, Smallwood also allegedly took part in a tax fraud conspiracy that involved submitting false returns to the IRS. The doctored returns included claims for nearly $222,000 in tax refunds, prosecutors said. The IRS processed many of the returns as if they were legitimate, issuing more than $110,000 in fraudulent refund checks.
Smallwood was the Eagles' fifth-round draft pick in 2016. He played three seasons in Philadelphia and also had stints in Washington, Pittsburgh and Jacksonville. He made around $3 million over his career, according to spotrac.
More than 3,500 people have been charged with federal crimes for defrauding COVID-19 relief programs. The Justice Department's COVID-19 Fraud Enforcement Task Force reported in April that more than $1.4 billion in stolen pandemic relief funds have been recovered. Another report last year from the Office of Inspector General for the SBA estimated that about $200 billion in potentially fraudulent loans and other assistance are linked to COVID-19 relief programs.
Smallwood is charged with felony counts of wire fraud, conspiracy to commit wire fraud and conspiracy to defraud the IRS. His attorney, Mark B. Sheppard, told the News Journal that Smallwood is cooperating with prosecutors ahead of a court appearance in December.
