OXFORD — Antwann Richardson took the stand in his own defense Tuesday, denying accusations that he and business partner Jabari Edwards defrauded the government of several million dollars in federal pandemic relief funds.
The Columbus men each face 17 criminal counts, including wire fraud, conspiracy to commit wire fraud, money laundering and making false statements.
The case centers around a group of companies owned by Edwards, which includes J5 Solutions, J5 GBL, the Bridge Group and North Atlantic Security Services. Also involved is Edwards’ personal, limited-liability company Edwards Enterprises. Edwards owned the companies, but Richardson oversaw the day-to-day operations.
Richardson, while being questioned by his attorney, Victor Fleitas, testified Tuesday that NAS was very much a viable company, and he and Edwards did not shut it down. He did concede it was facing some serious financial strain as a result of taxes, nonpayment from subcontractors, lawsuits in other states and the pandemic.
Richardson testified that revenue from NAS declined from about $3.6 million in 2019 to $1.9 million in 2020 to $811,000 in 2021. Although revenue for NAS’ parent company, J5 GBL, was starting to bounce back after the pandemic, NAS continued to suffer.
In 2019, NAS became embroiled in a lawsuit after the state of Louisiana voided contracts – an action another federal court found to be unlawful – and Edwards kept affected employees on the company payroll, Richardson testified. Edwards also kept employees across his family of companies on the payroll with no pay cuts during the shutdown in the initial months of the pandemic.
As a result, the company began accruing large amounts of payroll tax debt because employees were being paid but no revenue was coming in from contracts, Richardson testified.
“If nothing was open, there was nothing to guard,” Richardson said.
The pandemic “accelerated” already ongoing discussions about incorporating security cameras at NAS, Richardson said. The work to make that transition – including building a “command center” at J5’s offices in Court Square Tower – was already underway by January 2021, when Edwards decided to stand up a new brand, We C U, and do away with the North Atlantic name.
Unfavorable media coverage in Lowndes County about NAS’s tax debt also played a role in that decision, Richardson said. He and Edwards saw We C U as a continuation of NAS, just under a new skin.
Richardson testified that a handful of NAS personnel were kept on staff after the company was sold to Jim Bell and Christina Steadman in March 2021. Those employees continued to be paid by J5 Solutions – the “mother” company – using money from the Paycheck Protection Plan loans.
Richardson explained that he believed a parent company could use its federal relief money for other companies, and said the precedent was set by the Restaurant Rehabilitation Act, which stated that affiliated companies would all be considered one company for purposes of using relief money.
We C U was actively looking for work, Richardson testified. In fact, he said when he found out he had been indicted, he was at a trade show trying to drum up business.
Richardson also testified that there was income coming into the J5 family of companies that was not derived from loans. He said between Oct. 1, 2021, and April 30, 2022, the J5 companies had $2.3 million in income from clients.
All revenue from whatever source was “swept” regularly from company coffers into the J5 Solutions bank account, and then paid out again as needed, Richardson testified. That included the PPP and Economic Injury Disaster Loan program funds that NAS had received.
Richardson and Edwards contend that commingling PPP and EIDL funds with other money was not illegal and was not attempted money laundering.
Richardson testified that he had little to do with Edwards Enterprises, a consulting company belonging to Edwards that listed Edwards as its sole employee. He said it wasn’t unusual for Edwards Enterprises to loan money to Edwards’ other companies, and that those payments were recorded in company records as inter-corporate, or “affiliate,” loans. Edwards would sometimes also loan his companies money out of his own pocket.
Richardson testified that although he did not work for Edwards Enterprises or handle its money, he did fill out its EIDL applications.
When asked why, he responded, “(Edwards) is my boss.”
Richardson also contended that using EIDL money to pay taxes was legal, as one of the permissible uses under Small Business Administration guidelines was to pay down federal debt.
Richardson denied conspiring with Edwards to do anything illegal and testified that he did not knowingly do anything illegal during his time with J5.
The government will cross-examine Richardson Wednesday.
Brian Jones is the local government reporter for Columbus and Lowndes County.
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