48 Investigation: Daycare owner claims federal rental aid stolen

HUNTSVILLE, Ala. (WAFF) - The first batch of COVID relief from the federal government came in the form of the Paycheck Protection Program or Economic Injury Disaster Loans to business owners.

That’s how I came across the dilemma involving a north Alabama daycare owner who claims her relief money was stolen.

You’ll find this 48 Investigation boils down to one question - where’s the money?

While the young minds grasp their ABCs, the owner of Just 4 the Kids Daycare, Paulette Edwards, is trying her best to stay in business during a pandemic.

“It’s been hard trying to stay afloat, trying to keep the parents with a sense of security about their children coming,” said Edwards.

Just 4 the Kids Daycare in Huntsville is unlike many others. It takes in special needs children that other daycares won’t and even offers scholarships to low-income families so they can have childcare.

Cynthia Parker has a grandchild who attends the daycare.

“This facility means so much to this community. There are so many different types of children here and all of them are loved and nurtured,” said Parker.

At the height of the pandemic, during the shutdown, Edwards applied for Paycheck Protection Protection Loans to help pay her twelve employees and an Emergency Economic Injury Disaster Loan for rental assistance.

She was approved for a PPP loan for $19,000 in April of 2020 and another one in January for payroll. However, she was denied an Emergency Economic Injury Disaster Loan.

That’s when she received a notice from the Small Business Administration saying the funds had already been issued to that address.

“I said, well that’s impossible because I just filed it, so that’s impossible,” said Edwards.

Months later, SBA investigators told her a company named Suite Elements, and Ronnie Ellis received $24,000 that should have been disbursed to Edwards. That money would have helped her cover delinquent rent payments.

But what is Suite Elements and who is Ronnie Ellis? The only business at this address is Just 4 the Kids Daycare.

So let’s break this down.

Bo and Barbara Matthews are Paulette Edwards’ landlords. Their daughter is Brandi Matthews-Ellis, and her father-in-law is Ronnie Ellis.

Alabama’s Secretary of State website shows the registered agent Suite Elements as Brandi Matthews and the organizer as Ronnie Ellis.

However, it does not have a business license to operate in the City of Huntsville and there are no tax records with Madison County.

Edwards now has two lawyers helping her - Mari Morrison handling her now pending eviction case from her landlords due to those missed rent payments and Sam Hill handling what’s called a RICO case - alleging fraud, theft by deception, and identity theft.

Brandi Matthews Ellis and her father-in-law Ronnie are both named in that lawsuit.

While the Matthews are not named defendants in the RICO action, it is alleged they “aided and abetted” the Ellis’ file, a fraudulent application and conspired with them “to defraud the United States and Edwards.”

Edwards’ attorneys weighed in on this.

“Ronnie Ellis and his company is alleged to have done that here and that company is Suite Elements, it’s a moving company that is supposed to be housed there in the same facility, in the same building and there’s not such a thing there,” said Sam Hill.

“That money should have gone to enable her to keep her business vital during this time and keep it in operation and to keep her from being behind, so who got the money?” questioned Mari Morrison.

As for Ellis’ attorney, James Richardson issued the following statement:

“My clients fervently deny any misconduct, or causing Ms. Edwards any harm, and we intend to vigorously defend this case. We are confident that the Court process will reveal that Ms. Edwards’ lawsuit is totally unfounded and is motivated by malice towards my clients’ family.”

Edwards’ attorney Mari Morrison says they are seeking a fair hearing.

“The end goal for us is to have a fair hearing if we cannot reach a settlement and it appears we’re not going to reach a settlement,” said Morrison.

Ellis’s attorney has until May 23rd to respond to the fraud allegations in Edwards’ lawsuit. Meanwhile, her eviction case is set for a new hearing in Circuit Court with her landlords on June 25th.

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