Fugitive in $32M COVID Relief Scheme Captured in Jamaica Under Alias, Returned to U.S. to Face Fraud Charges
SOUTHERN DISTRICT OF FLORIDA – Elaine Escoe, a 41-year-old fugitive on the FBI’s Most Wanted Fraudsters List, was returned to the Southern District of Florida on Saturday to face federal charges for her alleged role in orchestrating a scheme that fraudulently obtained more than $32 million in federal COVID-19 relief funds.
Escoe was charged by indictment in 2025 with conspiracy to commit wire fraud, conspiracy to commit money laundering, and multiple substantive counts of wire fraud and money laundering. Following the issuance of a federal arrest warrant in May 2025, Escoe failed to appear for her court hearing and fled to Jamaica, where she was later discovered living under the fake identity of “Harley Newman.”
Acting on intelligence developed by the FBI, Jamaican authorities captured Escoe. She was returned to South Florida on Saturday through a coordinated effort involving the FBI, the U.S. Marshals Service, the U.S. Department of State’s Diplomatic Security Service Regional Security Office at the U.S. Embassy in Kingston, the Jamaican Constabulary Force (JCF), and the JCF Jamaica Fugitive Apprehension Team.
According to court records, Escoe and her co-conspirators submitted or caused the submission of fraudulent applications seeking over $32 million in Paycheck Protection Program (PPP), Restaurant Revitalization Fund (RRF), Shuttered Venue Operators Grant (SVOG), and Economic Injury Disaster Loan (EIDL) funds. The applications falsely represented the existence, payroll, revenue, and operations of purported businesses. To support the fraudulent bids, the conspirators created fake tax documents, fabricated bank records, and other false financial records that lenders and administrators relied upon for approval. Some applications were submitted for third parties in exchange for substantial kickbacks, sometimes reaching as high as 50% of the loan proceeds, with proceeds subsequently laundered among the group.
Escoe is the last remaining defendant charged in the scheme. Following a December 2025 trial, co-conspirators Alfred Davis, Cher Davis, and Latoya Clark were convicted by a federal jury, while James McGhow and Gino Jourdan previously pleaded guilty. Alfred Davis received a 235-month prison sentence, Cher Davis 87 months, Clark 70 months, Jourdan 46 months, and McGhow 42 months.
“This Most Wanted Fraudster allegedly obtained tens of millions in COVID-19 relief, stealing critical resources from legitimate businesses during a national crisis,” said Acting Attorney General Todd Blanche. “She fled the country believing she could escape justice but ultimately could not. Those who exploit taxpayer-funded programs will be held accountable by this Department of Justice, no matter how long it takes or where they attempt to hide.”
FBI Director Kash Patel highlighted the rapid success of the ongoing manhunt, noting that Escoe is the fourth Most Wanted Fraudster captured in just five weeks. “Elaine Angene Escoe, on the run since May of 2025, was captured in Jamaica while living under a fake identity of ‘Harley Newman’ – and returned to the United States today to face justice,” Patel said. He added that the FBI has now returned over 30 high-value targets since June, emphasizing that under the current administration, “fraud is no longer tolerated – and those who steal from American taxpayers have nowhere to hide.”
The FBI announced the creation of the Most Wanted Fraudsters List on June 4. Escoe was added to the list on June 8 and was apprehended less than two months later. The Department of Justice established the National Fraud Enforcement Division on April 7 to support President Trump’s Task Force to Eliminate Fraud, a whole-of-government effort chaired by Vice President J.D. Vance aimed at eliminating fraud, waste, and abuse within federal benefit programs.
$24M Settlement Reached as Dallas Lab Allegedly Forced Unneeded Tests on Seniors During COVID Crisis
WASHINGTON – Magnolia Diagnostics, a Dallas-based clinical laboratory, along with its owners John Bains and Kelly Bains, have agreed to pay the United States $19.2 million to resolve allegations that they violated the False Claims Act by billing Medicare for medically unnecessary respiratory pathogen panel (RPP) testing performed on seniors receiving COVID-19 tests. Magnolia investors will contribute an additional $4.8 million to resolve common law claims for unjust enrichment and payment by mistake, bringing the total settlement to $24 million.
The United States alleged that beginning in April 2020, John Bains and Kelly Bains orchestrated a revenue-generating strategy that required senior living communities seeking COVID-19 testing to also obtain expensive RPPs. To execute this protocol, Magnolia utilized prepopulated requisition forms that preselected RPP testing and associated diagnosis codes before any individualized clinical assessment took place. The lab allegedly treated provider signatures on these forms as blanket or standing orders authorizing RPPs for all seniors across entire communities or chains of communities, using those purported authorizations to test specimens collected during community-wide COVID-19 screening.
According to court records, Magnolia performed RPPs for some communities without any standing order and continued the practice even after providers and communities explicitly demanded COVID-19-only testing, questioned the panel’s medical necessity, or stated they had not authorized the RPPs. In several instances, John Bains allegedly threatened to withhold COVID-19 testing altogether from communities that refused to accept the RPPs. The allegations further state that Bains altered at least two provider-signed requisition forms to expand the apparent scope of authorization beyond the facility identified on the original document, subsequently using those altered forms to support RPP testing for residents across multiple facilities not covered by the initial order.
The government also alleged that Magnolia froze and stored thousands of respiratory specimens, sometimes for weeks or months, before thawing and testing them—generating RPP results long after they could inform timely treatment, isolation, or infection-control decisions. Between April 1, 2020, and Sept. 30, 2021, Magnolia and the Bains knowingly submitted or caused the submission of false claims to Medicare for thousands of RPPs that allegedly lacked medical necessity.
“The Justice Department is committed to protecting taxpayer-funded programs and holding accountable those who exploit them,” said Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division. “We will pursue not only companies that submit false claims and the owners who direct the misconduct, but also investors who receive and retain its financial benefits — especially when vulnerable Americans are exploited for profit.”
The claims resolved by the settlement are allegations only, and there has been no determination of liability.
Note: Read the Settlement with Magnolia Diagnostics, John Bains, and Kelly Bains here.
Read the Settlement with Magnolia Diagnostics Investors here.
California Man Arrested, Pennsylvania Man Charged in Alleged $52.7 Million COVID Tax Credit Fraud
HARRISBURG, Pa. – A California man was arrested Monday following a federal grand jury indictment charging him and a Pennsylvania man with conspiracy, mail fraud, and money laundering in connection with an alleged multi-state scheme to defraud the United States of more than $52.7 million in COVID-19 pandemic relief tax credits.
Christopher Slater was taken into custody yesterday after a grand jury sitting in Harrisburg returned the indictment. According to court records, Slater allegedly conspired with others to recruit business owners, use their personal and business information to file false tax returns, and subsequently launder the proceeds of the fraud. In total, Slater is accused of causing at least 290 false tax returns to be filed for 35 businesses, claiming over $52.7 million in Paid Sick and Family Leave Credit (SFLC) and Employee Retention Credit (ERC) funds, of which the Internal Revenue Service paid out more than $32.2 million.
The indictment also charges Mark Keagel, of York, Pennsylvania, with money laundering, conspiracy, and theft of government property. Keagel reportedly owned two defunct businesses and allegedly passed their information to one of Slater’s co-conspirators. Authorities allege that Slater’s associates subsequently filed false tax returns on behalf of Keagel’s businesses, prompting the IRS to mail approximately $3.6 million in fraudulent Treasury checks to Keagel, who then allegedly laundered those proceeds.
Congress authorized the SFLC tax credit to reimburse businesses for wages paid to employees who were on sick or family leave and could not work due to COVID-19, while the ERC was established to incentivize businesses to retain employees on their payroll during the pandemic.
“This indictment alleges that Christopher Slater orchestrated a multi-state fraud scheme that sought more than $50 million in taxpayer-funded pandemic relief funds,” said Assistant Attorney General Colin M. McDonald of the Justice Department’s National Fraud Enforcement Division. “This brazen fraud is unacceptable and will not be tolerated. The Fraud Division will continue to hold anyone accountable who steals from American taxpayers and abuses programs intended to provide relief during a national crisis.”
If convicted, Slater faces a maximum sentence of up to 20 years in prison for each of the seven mail fraud and mail fraud conspiracy counts. Both Slater and Keagel face up to 10 years in prison for each of the money laundering and money laundering conspiracy counts. Keagel additionally faces up to 10 years for each count of theft of government property.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
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