While the Small Business Administration could be doing more with data on the Economic Injury Disaster Loan program, the agencys independent watchdog has embraced this work. The False Claims Act will play a central role in the Departments pursuit of COVID-19 related fraud, Michael Granston, a Justice Department deputy assistant attorney general, said in December. In Louisiana, a federal grand jury recently indicted a Plaquemine woman named Lestreonia Rodrigue on fraud charges. He said that lenders have been extremely cooperative during investigations and their suspicious activity reports have been very useful.. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge. portville central school yearbooks; jennette mccurdy astroseek. louisiana ppp loan arrestsanxiety support groups columbia, sc Africa -China Review Africa -China Cooperation and Transformation fidelity express money order refund thamani ya rupia ya mjerumani Acting U.S. Attorney Audrey Strauss said: As alleged, these defendants conspired to rip off the SBAs COVID-relief small business loan program and financial institutions by lying about how many people they employed in their family business and how much they paid those employees. Assistant United States Attorneys Michael C. McGinnis and Sagar K. Ravi are in charge of the prosecution. BATON ROUGE, La. The DOJ says falsified tax records were submitted and in some cases, stolen personal information was also used in these attempts to defraud the PPP. According to the National Priorities Project, thats enough money to pay for both coronavirus vaccine doses for every American and 1.1 million full-time jobs at $15 an hour for an entire year. Applicants fraudulently obtained at least $16 million, per the Justice Department. Not all the blame can be placed at the Small Business Administrations feet. If approved, the SBA pays the lender back using federal funds. Jean Rabbittand Kevin Aguilarwere charged with bank fraud and conspiracy to engage in monetary transaction charges. POGO was unable to reach Edwards before publication. Secure .gov websites use HTTPS In a nod to changes that have improved oversight, William Shear, the Government Accountability Offices director of financial markets and community investment, testified on March 25 that, Although SBA has taken some steps to mitigate fraud risks to PPP and EIDL, such as conducting PPP loan reviews and implementing new EIDL controls, the agency has not yet conducted a formal fraud risk assessment for either program. The Small Business Administration last month agreed to conduct such a risk assessment. That story of corruption inside SBA has been overshadowed by other criminal allegations against Greenberg, notably child sex trafficking charges, and a scandal that might bring down a member of Congress. Many believe a high percentage of these grants were stolen, but some federal prosecutors with heavy caseloads may find it hard to justify BATON ROUGE, La. The Federal Trade Commission wrote in February that, Last year, we received 99,650 reports of fraud involving business or personal loans, compared with 43,920 reports in 2019, before the pandemic began. The Justice Department brought civil claims against the company under both the False Claims Act and Financial Institutions Reform, Recovery and Enforcement Act. U.S. Attorney Evans reiterated that the indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt. (In late March, the Justice Department told Congress that it had charged $446.8 million in losses related to PPP. Some of these cases may still be under seal and charges are routinely being unsealed.) If the borrower can prove they used the money to pay employees and eligible expenses, they can ask the SBA for loan forgiveness. PPP Loan Recipient List By State . One St. Andrews Plaza - New York, NY 10007, Three Family Members Arrested for Misrepresenting Employee Payroll Figures to Receive COVID-19 Loan Funds for Chain of Family-Owned Nail Salons in New York Metropolitan Area and Other Businesses, James Margolin, Nicholas Biase I urge anyone who believes he or she is a victim of this type of fraud to report it to the National Center for Disaster Fraud," said US Attorney Brandon Fremin. Unfortunately, the owners of Victoria Nails & Spa saw this program as their own personal piggy bank. $12.2B TOTAL LOAN AMOUNT. So were trying to reverse that. And if theyre not interested in prosecuting, for whatever reason, we dont further pursue it at that time., Many of the cases are moving quickly, despite their complexity. PPP Loans in Raceland, LA - Page 13. In order to support the false representations in the loan applications about the number of employees at, and the wages paid by, the Victoria Companies, the defendants submitted fraudulent and doctored payroll and tax records. Between May and October 2020, financial institutions filed more than 21,000 and 20,000 suspicious activity reports (SAR) related to PPP and EIDL, respectively, according to the Government Accountability Office. Greenberg is a friend of Florida Republican Matt Gaetz, and both were identified in a recent New York Times report as having allegedly paid women for sex, as well as potentially a 17-year-old girl. The PPP loans are forgivable under certain conditions and the loan forgiveness is not taxable income for federal tax purposes. Normally, the office of inspector general receives between 700 and 800 hotline complaints or tips a year. The involvement of a Small Business Administration employee in a pandemic loan fraud case raises questions about the agencys vetting of employees. ) or https:// means youve safely connected to the .gov website. The addresses listed for the two companies, according to SBA loan data, also do not match the addresses in the states corporation recordsyet another sign of potential fraud. In July, banks filed nearly seven times the average number of suspicious activity reports. For instance, in one larger case, the Justice Department has charged 19 individuals to date. The case against EVERY began as a result of a referral from the COVID-19 Pandemic Response Accountability Committee (PRAC) regarding possible fraudulent Paycheck Protection Program loans (PPP). This March, the Government Accountability Office revealed that 4 months after SBA started using a system to approve Economic Injury Disaster loans in batches, agency officials realized this system contained alerts that should have been reviewed by loan officers, but had not been. The Justice Department has brought charges in at least 56 cases for alleged Paycheck Protection Program fraud, according to a POGO review detailing trends in these first cases. The Paycheck Protection Program saved millions of jobs. DAVID RAINES COMMUNITY HEALTH CENTER, INC. The case led to criminal charges, including aggravated identify theft, filed in Texas in February. And I, I think we ought to prosecute every single one of them to the full extent of the law, said Kennedy. The cases involve attempts to steal a total of more than $175 million from the program, with actual losses to the federal government totaling more than $70 million, the DOJ reports. NGUYEN, 44, and VICTORIA HO, 31, both of Hicksville, New York, and DAT HO, 33, of the Bronx, New York, are each charged with one count of conspiracy to commit bank and wire fraud, which carries a maximum sentence of 30 years in prison; one count of major fraud against the United States, which carries a maximum sentence of 10 years in prison; and one count of conspiracy to make false statements, which carries a maximum sentence of five years in prison. Has the curve flatten in my town? Click on a company's name to see additional loan details. Federal investigators want you to speak up about PPP fraud, Federal investigators want you to speak up about PPP Fraud, LSU WR Malik Nabers arrested in New Orleans; prosecutors refuse to charge with condition, LPSO: Deputy arrested, terminated after making harassing phone calls, TikTok sets new default time limits for minors, Fight involving 9 people on Southerns campus leads to 1 arrest. (The latest round, which began in January, allowed some applicants to receive a second Paycheck Protection Program loan. So now, he says agencies must go after anyone who might be taking money theyre not entitled to. Nearly 11.5 million people filed applications, resulting in more than $792 billion worth of loans. Lenders can be liable under the FCA for knowingly certifying ineligible borrowers for PPP loans, including by failing to employ sufficient anti-money laundering protocols, according to a memo from the Cleary Gottlieb law firm. Does something look fishy to you? This table shows the top 5 industries in Louisiana by number . While not all of these new reports can be attributed to the government relief effort, they are a sizeable share of the increase., Similarly, a February report by the Pandemic Response Accountability Committee stated that Identity theft is on the rise and has been exploited by bad actors to obtain pandemic response funds, such as unemployment insurance benefits, PPP loans, and EIDLs., Grossman told POGO, There are also PPP and EIDL cases were aware of that are being investigated by state and local authorities, because my agents out in the field get calls from state police and local police departments, where they have received complaints from citizens on identity theft, for example.. VICTORIA HO will be presented tomorrow in Manhattan federal court before U.S. Magistrate Judge Sarah Netburn. What happens when the watchdog tasked with overseeing the most powerful law enforcement agency in the country doesnt do its job? The cash injection and potentially forgivable loans were . Complaints can also be filed online here. The law firm K&L Gates, however, wrote in December that since Congress allowed lenders to rely on borrowers self-certified information, that should decrease the likelihood that otherwise law abiding financial service providers would face government scrutiny for the fraudulent acts of their borrowers., The role of employees who become whistleblowers may emerge as a significant factor in civil Paycheck Protection Program cases. Joshua Edwards, the supposed vice president of ASLAN International Ministry, is accused of submitting fake payroll, tax, and financial documentation in support of the loan application. Loan Range No. I want to thank the U.S. Attorneys Office and our law enforcement partners for their dedication and commitment to seeing justice served., FBI Assistant Director William F. Sweeney Jr said: The benefits offered by the CARES Act for PPP loans were established to help small businesses survive during the pandemic. The largest loan paid out was $20,833. The Paycheck Protection Program (PPP) established by the CARES Act, provides small businesses with funding for payroll costs, mortgage interest, rent, and utilities. We expect to go to trial because of the serious nature of this matter.. This table shows the top 5 industries in Louisiana by number of loans awarded, with average loan amounts and number of jobs reported. Aqeel used some of the proceeds to purchase a Lamborghini sports car, according to the Justice Department. Those who suspect PPP fraud or may have been a victim of such fraud should contact the National Center for Disaster Fraud (NCDF) hotline at 866-720-5721. Small Business Administration management flagged loans for at least one of 35 reasons, such as the recipient was created after the cutoff date of February 15, 2020, or the recipients owner had a criminal record, potentially rendering the recipient ineligible. April 15, 2021. In email and text exchanges, defendants acknowledged that a number of the companies did no legitimate business, disqualifying them from receiving the loans. In 111 instances, the zip code in the Small Business Administrations data did not match the state provided. Origin Bank. The Small Business Administration has sent 1.34 million referrals related to Economic Injury Disaster loans to its office of inspector general, which is tackling these and Paycheck Protection Program fraud cases in coordination with a host of other law enforcement agencies. In fraud cases where there is no apparent misuse of a loan, civil enforcement may be more likely than criminal prosecution. THE DELAHOUSSAYE CO., INC. $150K . For media inquiries, contact: Red Flags: The First Year of COVID-19 Loan Fraud Cases, $189 Billion in Questionable Paycheck Protection Program Loans, With over $189 billion in questionable Paycheck Protection Program loans, law enforcement has just scratched the surface, By Even if the debt is cleared, the loans can end up wreaking havoc on individuals and businesses credit scores. But even with an allegedly corrupt insider, a loan system with adequate checks should have prevented Greenbergs loans from being approved. Senator Kennedy admits the program may have had some holes in it, due to how quickly it was rolled out, and the loan program has been updated many times to expand eligibility. They allegedly exploited a program designed to provide vital funding for small businesses that are legitimately struggling in the midst of the pandemic. Director for the Louisiana SBA District Office Michael Ricks said while that information may raise some red flags on the surface, he explained that not complying with an industrys licensing requirements does not necessarily disqualify someone from being eligible for a PPP loan. Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justices National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form. Louisiana PPP loan fraud cases may be initiated by employees of banks who disperse PPP funds in Louisiana, employees of companies who have received CARES Act aid in Louisiana, or any other individual who has inside information on a PPP loan fraud case originating in Louisiana. According to the MITRE Corporation, a mismatched zip code or insufficient award description doesnt seem particularly egregious. In December 2020, an independent auditor informed the SBA that, out of 5.2 million Paycheck Protection Program loans in 2020, the agency made over 2 million approved PPP loan guarantees worth some $189 billion potentially not in compliance with the law. The SBA now also conducts manual loan reviews for the largest loans in the PPP portfolio and a random sampling of other loans. Underscoring the tension between fraud prevention and disbursing assistance quickly, the added checks to verify information submitted by applicants have somewhat slowed the processing of loan applications. A borrower applied for a PPP loan from a lender or bank. Click here for information on the investigation into the Mount Vernon Police Department. More than a year after the pandemic brought much of the economy to a standstill, mounting fraud cases underscore how the Small Business Administrations (SBA) oversight of its massive taxpayer-backed lending programs proved to be inadequate as they became magnets for fraudsters. The prosecution of this case is being handled by Assistant United States Attorney Brian M. Klebba, Chief of the Financial Crimes Unit, and Assistant United States Attorney Edward Rivera, COVID-19 Fraud Coordinator. If someone defaults, or cant pay it back, the SBA will still reimburse the lender. Help us crowdsource fraud detection in the PPP program! Analyzing that data for red flags is a way to identity subsets of loans and grants that warrant closer scrutiny and to help direct scarce investigative resources. Search arrest records and find latests mugshots and bookings for Misdemeanors and Felonies. This interactive map provides a picture of the ranks of the unemployed at the national, state and county level. 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