City councilmember, daughters indicted on PPP fraud charges

CHARLOTTE — Charlotte City Councilmember Tiawana Brown, 53, and her two daughters faced a federal judge the day after they were indicted on fraud charges.

They pleaded not guilty.

The Democratic councilmember and her daughters are accused of fraudulently obtaining more than $124,000 in COVID-19 relief funds, including spending approximately $15,000 on a birthday party for the councilwoman, announced Russ Ferguson, U.S. Attorney for the Western District of North Carolina, on Thursday morning.

Tiawana Brown, Tijema Brown, 30, and Antionette Rouse, 33, all of Charlotte, are accused of wire fraud conspiracy and wire fraud in connection with fraudulent applications filed to falsely obtain COVID pandemic relief funds, Ferguson said.

Brown represents District 3 and was elected to Charlotte City Council in 2023. She made history by being the first formerly incarcerated person to be elected to Charlotte City Council. She served four years in prison on federal fraud charges.

On Friday, all three did not face any detention and were released on $25,000 unsecured bonds. They must surrender their passports. Councilmember Brown can still travel through the U.S.

She can speak with probation officials to get international travel approved.

They asked for jury trials.

The allegations

Between April 2020 and September 2021, the defendants conspired to execute a scheme to defraud the Small Business Administration’s (SBA) Economic Injury Disaster Loan (EIDL) program and its Paycheck Protection Program (PPP) and obtain COVID pandemic relief funds for their businesses, through the submission of loan applications that contained false information or false documentation.

The false documentation allegedly generally included fake tax forms and other misrepresentations. The defendants are also accused of submitting false statements to obtain forgiveness of the PPP loans. In total, the defendants allegedly submitted at least 15 applications for EIDL or PPP funds and falsely obtained at least $124,165 in connection with their scheme to defraud, Ferguson stated.

The indictment also alleges that the EIDL and PPP funds were deposited into the defendants’ bank accounts. Ferguson said the mother and her daughters did that instead of using the pandemic relief funds to pay for qualifying expenses as purported in the loan applications.

$15,000 birthday party

The councilwoman and her daughters are accused of using the proceeds on personal expenses, including allegedly $15,000 on a personal birthday party for Councilwoman Tiawana Brown, said Ferguson. She runs a nonprofit, Beauty After the Bars, which aims to help women who were formerly incarcerated. Tiawana Brown is accused of using money from her nonprofit’s bank account, which contained PPP loan funds.

Tiawana Brown posted images on Instagram in 2021 that showed her lavish party held at the Harvey Gantt Center in Uptown Charlotte. This was before she ran for public office.

The photos showed her on a horse-drawn carriage and a throne, which was noted by federal agents.

Tiawana Brown held a news conference Thursday morning after the indictment was handed down.

Channel 9’s Joe Bruno asked her, “The indictment says that you used those funds on a birthday party. Is that the case? Did you use the funds for that birthday party?”

She said, “I paid it back.”

Tiawana Brown said she applied for a loan, which she said was about $20,000, and paid it back after becoming aware of the investigation.

At one point, her attorney stepped in and said she could not address that.

“Did you use the pandemic relief fund for payroll?” Bruno said.

Again, questions we are not going to get into in this conference," Tiawana Brown’s attorney said.

“I am not here to be tried in the media,” Councilmember Brown said in a news release she sent out before the indictment was official. “However, I must address the allegations against me by the United States District Court. I will have my day in court, and I trust the process.”

The defendants are charged with wire fraud conspiracy and wire fraud. If convicted, they face maximum sentence of 20 years in prison for each offense charged in the indictment.

“I want to be clear: these allegations concern actions that took place before I took office,” Brown said. “I have always been transparent about my past and have worked tirelessly to serve my community with integrity and dedication.”

 A federal district court judge will determine any sentence imposed after considering the U.S. Sentencing Guidelines and other statutory factors

Councilmember Brown said she was only speaking for herself and not her daughters.

She said she will be pleading not guilty and will not resign from the Charlotte City Council.

“I am committed to continuing my work for the residents of District 3,” she said in the news release. “I trust in the legal process and am confident that the truth will come to light.”

She and her daughters are due in court Friday morning.

‘Enforced that two different ways’

Channel 9 spoke with U.S. Attorney Russ Ferguson earlier this week about PPP loans.

Ferguson described the process to track down people who make an innocent mistake versus thieves looking for a cover-up.

“So, we’ve enforced that two different ways,” Ferguson said. “There were some less egregious cases where people maybe made a mistake. We’ve sued them to get the money back, sometimes with a penalty. But where people have really used the government to enrich themselves and knowingly, so we’ve gone after them criminally and put them in jail.”

Ferguson told Channel 9’s Hunter Sáenz that the investigation into Brown started before his time as the local U.S. Attorney.

In Brown’s case, the feds don’t believe this was a simple mistake. They allege in the indictment that Brown and her daughters conspired with one another and opened 15 different applications for COVID relief funds.

“She applied for COVID relief money using false information and false forms. She attached IRS forms that were not real and not actually submitted to the IRS, made false statements on the applications and got taxpayer money in return,” Ferguson said.

Investigators say Brown and her daughter used a fake IRS form under the business name TC Collection. Feds say the form falsely claimed that TC Collection earned more than $96,000 in net profits in 2019. However, the busienss is not registered with the North Carolina Secretary of State’s Office.

So far, our local U.S. Attorney’s Office has already gotten back more than $18 million in COVID relief fraud cases.

Council weighs in

Statement from Councilman Malcolm Graham:

“As a member of the Charlotte City Council, my focus remains on serving the people of our city by working on important issues such as jobs, housing, and transportation. I am aware of the current situation involving Councilmember Brown. I trust that she will seek appropriate counsel and make decisions that are in her best interest and in the best interest of the City of Charlotte. In the meantime, I remain committed to the work our community expects from me.”

City of Charlotte statement:

By Ms. Brown’s own statement, any alleged activities predate her involvement with Charlotte City Council. Furthermore, the city has not been contacted by the US Attorney’s Office, Department of Justice, Federal Bureau of Investigation and the City of Charlotte is not being investigated pertaining to this or her role as a council member.

Any questions about this issue should be directed to Ms. Brown or her attorney.

Statement from Councilmember Brown:

Councilmember Tiawana Brown of Charlotte City Council District 3 will speak publicly in response to what she characterizes as a political attack and a deliberate effort to interfere with her re-election and silence her voice.

“I am not here to be tried in the media,” said Councilmember Brown. “However, I must address the allegations against me by the United States District Court. I will have my day in court, and I trust the process.”

Councilmember Brown also noted that the allegations stem from events that occurred four to five years before she took her oath of office—during the height of the national pandemic and COVID crisis—and do not reflect her current role, values, or service to the community.

The allegations pertain to activities that allegedly occurred during the early stages of the pandemic, prior to Ms. Brown’s election to the City Council. She was elected to represent District 3 in November 2023 and was sworn into office in December 2023. Ms. Brown emphasizes that the allegations are unrelated to her tenure as a public official.

“I want to be clear: these allegations concern actions that took place before I took office,” said Council Member Brown. “I have always been transparent about my past and have worked tirelessly to serve my community with integrity and dedication.”

Ms. Brown has a history of community involvement and advocacy, particularly focusing on supporting formerly incarcerated individuals.

She founded the nonprofit organization Beauty After the Bars, which assists women transitioning from incarceration. Her election marked a historic moment as she became the first formerly incarcerated person to serve on the Charlotte City Council.

“I am committed to continuing my work for the residents of District 3,” Ms. Brown added. “I trust in the legal process and am confident that the truth will come to light.”

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