A Mount Vernon city employee and her daughter have been accused of stealing more than $1.5 million meant to help struggling businesses during the pandemic.

Alicia Ayers and Andrea Ayers, of Mount Vernon, along with Traci Proctor, who lives in Georgia, were arrested Tuesday morning.

In court documents released Tuesday, prosecutors say the trio applied for 300 applications for federal Economic Injury Disaster Loans, but they were bogus companies.

Last summer, the defendants claimed some businesses had at least 10 employees - which prosecutors say is not true - so the federal government sent about $1.7 million to the business owners.

The business owners then paid the suspects, according to the filing.

Sources tell News 12 Andrea Ayers is an ordinance officer for the City of Mount Vernon, and the head of the city's CSEA union branch.

News 12 reached out to the city about her status but hasn't heard back.

FBI Assistant Director William Sweeney said, "While small businesses throughout the country were clamoring for the economic support they so desperately needed after the first quarter of the pandemic, those charged today allegedly saw the SBA's Economic Injury Disaster Loan Program as nothing more than an opportunity to turn a quick profit."

Back in October, News 12 reported on a federal and city investigation into a kickback scheme involving federal loans and Mount Vernon city employees.

The city found 17 employees got COVID-related loans.

At that time, no one was fired - in part because the city said it couldn't determine whether those loans were fraudulent.

News 12 was told it would be up to the federal government.

Tuesday's complaint does not mention any of the alleged co-conspirators.

News 12 now knows that prosecutors believe one city employee is a ringleader. The question is how many others could be involved and what potential consequences could they face?

The trio arrested Tuesday face wire fraud and identity theft charges, and that could net them significant prison time if they're convicted.