HOT SPRINGS, Ark. – A Hot Springs man was sentenced to more than two years in prison for scamming 33 states out of their paycheck protection program funds. 39-year-old James Heritage pled guilty Thursday to fraud And must report to federal prison by July 6.

According to David Clay Fowlkes, the U.S. Attorney’s Office for the Western District of Arkansas, Heritage applied for almost every state’s unemployment assistance program using false information. 33 of the states Heritage applied to had automatic acceptance systems to send money quickly to legitimate businesses.

“The focus in the early days of the PPP was on speed,” Fowlkes explained. “Unfortunately when you do have a program that moves as fast as that, there are things that fall through the cracks.”

Fowlkes added it is estimated as much as 10% of the total funds that were supposed to go toward pandemic assistance have been spent in other places, either getting in the hands of scammers or going toward investigating fraud.

Fowlkes said, “Those resources are supposed to be used to help people during one of the most difficult times in our history, and instead of those resources going to help people, a lot of states have had to use those resources to investigate and weed out fraudulent claims like the ones that were an issue in this case.”

The Western District of Arkansas is reviewing hundreds of false applications. The most common and hardest to catch is due to identity theft.

“They don’t even know that an application has been made or funds have been dispersed,” Fowlkes advised. “Keep a close watch on your credit report. Keep a close watch on your personal information, personally identifiable information. If you notice unusual activity, report it.”

Heritage’s case was investigated by the Department of Labor Office of the Investigator General, the Federal Bureau of Investigations, the United States Postal Inspection Service, and the Small Business Administration Office of the Inspector General. Assistant United States Attorney Hunter Bridges prosecuted the case for the United States.

On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across the government to enhance efforts to combat and prevent pandemic-related fraud.  

The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts.  

For more information on the Department’s response to the pandemic, please visit

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: