Theodore Jackson faces eight counts of wire fraud and two counts of money laundering in connection with fraudulent Paycheck Protection Program applications submitted during the pandemic. Agents will transfer Jackson to Atlanta, where he will enter a plea during his first court appearance.

Jackson allegedly worked with Clyde Chavo, an Atlanta man who federal investigators say orchestrated the scheme. Agents arrested Chavo at his home in Atlanta’s Hunter Hills neighborhood before sunrise Wednesday after a grand jury indictment.

According to court records, Chavo set up fake businesses and forged bank statements to support fraudulent PPP applications claiming he could not pay employees. The government wired him more than $400,000 on three separate dates in 2020 and $125,000 in 2021, federal prosecutors allege.

Investigators accuse Jackson of helping steal strangers’ identities to connect to the fake businesses. Both men allegedly filled out applications and transferred the stolen funds across multiple bank accounts.

Chavo pleaded not guilty in federal court. This marks his second major fraud conviction - he served more than three years in prison after being convicted in 2012 of stealing the identities of at least 10,000 people in a tax return scheme.

The arrests represent the latest in a series of federal prosecutions targeting COVID-19 relief fraud. The Paycheck Protection Program distributed hundreds of billions of dollars to small businesses during pandemic lockdowns, but the rushed rollout created opportunities for fraudulent claims.

Jackson’s arrest highlights how the fraud schemes often crossed state lines, requiring coordination between federal agencies. The case will likely be prosecuted in Atlanta’s federal district court, where Chavo entered his plea.