OXFORD — Antwann Richardson continued to testify in his own defense Wednesday, pushing back against the prosecution’s claims he and business partner Jabari Edwards defrauded the government of about $3.3 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, among others. Also involved is Edwards’ personal, limited-liability company Edwards Enterprises. Edwards owned the companies, but Richardson oversaw the day-to-day operations of the J5 companies.
Assistant United States Attorney Philip Levy cross-examined Richardson for about three hours Wednesday afternoon, pressing him on claims he made Tuesday during direct examination.
The prosecution claims, in part, that COVID relief funds applied for by one company were used inappropriately in other companies owned by Edwards.
Richardson testified that it was Tina Steadman, who was then comptroller for the J5 companies, who filled out the application for the Paycheck Protection Program loan for NAS. He said Edwards’ initials, entered into an electronic form at certain points on the application, were entered by Steadman, not Edwards himself.
One of the defense’s arguments is that the commingling of funds is not illegal, and in fact J5 GBL — the Edwards company that technically owned NAS — was free to use that money across other, affiliated companies.
Levy pointed out during his cross-examination that the list of affiliated companies included with the loan documents did not list all of the affiliated entities, and Richardson conceded the point but said the omission was an “oversight” by Steadman.
Levy questioned Richardson about the “sweep” system, by which funds in the accounts of the J5 companies were moved to the J5 Solutions’ banking account, where they would be distributed back out as needed. Richardson testified that Steadman suggested that system, and said the “sweeps” were not automated but performed “manually” by senior management.
The PPP and Economic Injury Disaster Loan funds that NAS received were swept into the common account by design, Richardson said. He maintained that money was used for payroll and business expenses at NAS.
While an earlier PPP loan for NAS was forgiven by the Small Business Administration, the second loan — which the government contends was misused — was not, Richardson said.
Levy challenged Richarson’s contention during Tuesday’s testimony that EIDL received by NAS could be used to pay taxes, leading Richardson through boilerplate language on the application that did not mention taxes or debts.
However, Richardson contended that the law changed on Sept. 8, 2021, to allow exactly that. The rule change was not reflected on the loan documents because the SBA “doesn’t change the (application) documents” when the law is updated.
Richardson testified that although he was instructed to apply for EIDL funds on behalf of Edwards Enterprises, he just filled out the forms and did not handle or sign any actual loan documents. Edwards handled that part of the process, Richardson said.
“I never tried to touch any of that money,” Richardson testified. “I only saw screenshots of the accounts and some records. The only time I asked (Vice President Shanta Blakney) to move money in the Edwards Enterprises accounts was if (Edwards) asked me to.”
Richardson denied government assertions that nobody could definitely show that PPP and EIDL money was used for payroll and business expenses. He testified that he personally put together an exhaustive Excel spreadsheet, based on company bank records, that tracked every dollar during the time period in question.
That document was turned over to the government, he testified.
He also testified that, although tax returns for J5 Solutions do not reflect income from NAS, there was no requirement that those be listed.
“You don’t have to file combined returns,” Richardson said. “You wouldn’t see that here.”
On the subject of the sale of NAS, which occurred shortly after an application for COVID relief funds were applied for on behalf of that company, Richardson testified that NAS never ceased doing business and repeated previous arguments it was shifting to camera, cybersecurity and electronic security rather than in-person security.
When Levy questioned him about an Aug. 10, 2021 email from a tax consultant retained to help resolve NAS’ payroll tax debt and penalties that stated “(NAS) was closed,” he said that it reflected the consultant’s opinion rather than the reality on the ground.
“The consultants recommended we close NAS because a defunct business would not owe taxes,” Richardson said. “We chose not to do that.”
On redirect by his attorney, Victor Fleitas, Richardson denied any illegality.
“We never had any ill intent,” Richardson said. “I was never asked to break the law. We were trying to do the right thing to run our businesses.”
Richardson’s defense rested after his testimony.
Edwards told the court that he did not intend to testify, and his attorney Chandler Rogers, also rested without calling any witnesses.
Jury deliberation will likely begin Thursday.
Brian Jones is the local government reporter for Columbus and Lowndes County.
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