Two North Carolina Women Sentenced for More Than $1.5 Million COVID-19 Relief Fraud Scheme
On May 15, 2025, the U.S. Attorney’s Office for the Eastern District of North Carolina announced that two women from North Carolina were sentenced for their roles in a multi-million-dollar COVID-19 relief fraud scheme, in which they obtained over $1.5 million in Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) funds using false applications.
According to court documents, defendants Dawn James of Zebulon and Tracey Bowles of Raleigh conspired to submit fraudulent PPP applications on behalf of businesses that either did not exist or had no qualified employees.
James inflated payroll figures and enlisted recruiters to submit applications, diverting loan proceeds into shell accounts.
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Bowles facilitated the scheme by helping recruit additional identities for loan applications, receiving kickbacks from James for each approved PPP or EIDL disbursement.
In January 2025, James was sentenced to 96 months in federal prison, followed by three years of supervised release, and ordered to pay $1,523,000 in restitution.
Bowles received 60 months of imprisonment and two years of supervised release, with an identical restitution obligation.
U.S. District Judge Louise W. Flanagan emphasized that “exploiting critical relief programs during a national crisis is especially reprehensible” and noted that the women’s actions contributed to delays in aid for legitimate small businesses.
Investigators from the IRS Criminal Investigation division and the FBI uncovered that James submitted multiple EIDL applications for phantom businesses, overstating employee counts and payroll expenses.
Evidence presented at sentencing revealed that, on several dates, James claimed over 100 employee hours per day for a single doctor visit—an impossibility given typical work‐hour constraints.
The Department of Justice noted that cases like James and Bowles’s underscore ongoing enforcement efforts against COVID-19 relief fraud.