TEXARKANA, Texas — A Maud, Texas, man accused of submitting phony applications for millions in pandemic relief funds is back in federal custody.
Samuel Morgan Yates, 34, has repeatedly tested positive for methamphetamine since being granted pretrial release in May 2020, according to a March 4 motion filed in the Texarkana Division of the Eastern District of Texas by Assistant U.S. Attorney Jonathan Hornok.
Yates’ case was set for a show cause hearing Wednesday morning but a docket entry made Tuesday in the case indicates Yates is waiving his right to appear in court on the matter. Yates will remain in federal custody while his case proceeds.
According to the government’s motion, Yates admitted to using meth in November because of “stresses in life” and because of an untreated attention disorder.
Yates is accused of making two fraudulent applications for funds through the Paycheck Protection Program authorized by the federal Coronavirus Aid, Relief and Economic Security Act enacted by Congress in late March 2020.
Yates allegedly claimed falsely that he needed the funds for his business, Lone Star Tuning.
“Lone Star Tuning was a sole proprietorship located in Maud, Texas. Defendant Samuel Morgan Yates was the 100% owner of Lone Star Tuning, and its business address was located at his residence. Lone Star Tuning had no operations prior to January 2020 and generated no revenue,” the indictment states.
Yates allegedly applied for millions in funds from the PPP program and received more than $500,000 in an account he maintained at a credit union in Texarkana, according to records.
“In the application submitted to the first lender, Yates allegedly sought $5 million in PPP loan proceeds by fraudulently claiming to have 400 employees with an average monthly payroll of $2 million. In the second application, Yates claimed to employ over 100 individuals and was able to obtain a loan over $500,000,” the press release states.
Yates is also accused of submitting forged tax documents with each application.
According to the indictment, the government is seeking Yates’ forfeiture of more than $500,000.
If convicted, Yates faces up to 20 years in federal prison and a fine up to $250,000 on each count.
But Yates’ legal troubles don’t end in federal court. Yates is currently charged in Bowie County, Texas, with hindering a secured creditor. Yates allegedly refused to relinquish possession of some heavy equipment for which he was more than $7,000 behind on payments in November 2020, according to a probable cause affidavit.
Yates is charged with a state jail felony in Bowie County and faces six months to two years in a state jail if convicted. He is scheduled to appear next week before 202nd District Judge John Tidwell in that case.