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Maurice Kamgaing, 41 sent PPP loan . Government Accountability Office revealed, according to Shear of the Government Accountability Office, the Justice Department unveiled new charges, Greenberg bribed an unnamed Small Business Administration insider, according to the Government Accountability Office, 5.8 million advance grants worth $20 billion, underutilized Program Fraud Civil Remedies Act, Financial Institutions Reform, Recovery and Enforcement Act (FIRREA), first settlement in a Paycheck Protection Program civil enforcement case, remarks before the U.S. Chamber of Commerce, revamped the Paycheck Protection Program loan application, for the Pandemic Response Accountability Committee, Lamborghinis, Strip Clubs, Bogus Companies, and Lies, Spike in Suspected Business Loan Fraud Reports Coincided with Paycheck Protection Program, How a Ukrainian Oligarchs Companies Got Paycheck Protection Program Loans. 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. (He also applied for a separate loan just days before being indicted.) The inspector general offices workload has increased significantly, Grossman said. At least one Small Business Administration employee allegedly took bribes last year to process fraudulent Economic Injury Disaster loans, according to criminal charges recently unveiled by the Justice Department related to the developing scandal involving Representative Matt Gaetz (R-FL). 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. GOODWILL INDUSTRIES OF NORTH LOUISIANA, INC. BIOMEDICAL RESEARCH FOUNDATION OF NORTHWEST LOUISIANA, ROSS H DIES DDS & BENJAMIN A BEACH DDS, LLC, Agriculture, Forestry, Fishing and Hunting, Professional, Scientific, and Technical Services, Administrative and Support and Waste Management and Remediation Services, Other Services (except Public Administration). complaint (20-mag-12908). As far as the state of Louisiana is concerned, there is no requirement that a sole proprietor have a specific license at the state, said Ricks. And this is not the only case. The PPP loan forgiveness, Fairs, Festivals, and Other Special Events, The Importance of Protecting Client Tax Information, 2022 Practitioner Tax Update Seminar Schedule, Update Showing 50 of 9,060 results. The PPP loans are forgivable under certain conditions and the loan forgiveness is not taxable income for federal tax purposes. The number of potentially questionable loans approved through these programs is vast, as will be the task of determining how many of those loans were fraudulent or otherwise improper. Sah, who pleaded guilty on March 24, used the funds to buy a Bentley convertible and multiple homes, among other things. However, the Trump administrations Justice Department also sought to assuage companies concerns, especially in regard to qui tam False Claims Act lawsuits. The United States Attorneys Office would also like to acknowledge the assistance of the Veterans Administration, Office of the Inspector General; United States Department of Labor, Office of the Inspector General; United States Department of Homeland Security, Homeland Security Investigations; and the United States Secret Services Cyber Fraud Task Force, consisting of the Jefferson Parish Sheriffs Office, Lafourche Parish Sheriffs Office, Thibodeaux Police Department, and the Louisiana Bureau of Investigation with this matter. The Economic Injury Disaster Loan program is longstanding, and until recently the Small Business Administration limited these loans to $150,000 (last month it raised the cap to $500,000). Share sensitive information only on official, secure websites. Even if the debt is cleared, the loans can end up wreaking havoc on individuals and businesses credit scores. Indeed, on the day lenders began processing applications for Paycheck Protection Program loans last year, Small Business Administration Inspector General Hannibal Mike Ware issued a white paper outlining lessons learned from previous stimulus loan programs. An estimated 1% of that 2009 stimulus was lost to fraud (some claim the rate is even lower than that). Funds disseminated through this program, The Paycheck Protection Program (PPP) established by the CARES Act, provides small businesses with funding for payroll costs, mortgage interest, rent, and utilities. However, not everyone taking part in the federal program was looking to keep their business doors open. The program worked like this. (Eligible companies and nonprofit organizations can apply for and receive both Paycheck Protection Program and Economic Injury Disaster loans.). Normally, the office of inspector general receives between 700 and 800 hotline complaints or tips a year. The Paycheck Protection Program (PPP) established by the CARES Act, provides small businesses with funding for payroll costs, mortgage interest, rent, and utilities. Ms. Strauss praised the investigative work of the SBA-OIG, FBI, and IRS-CI, and noted that the investigation remains ongoing. Filed under investigation Allegedly misrepresenting the number of employees on their payroll to obtain the funding, they deposited this money into accounts controlled solely by them. 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. 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. So were trying to reverse that. 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. 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. Ryan Summers is a research fellow for POGO. In Louisiana, a federal grand jury recently indicted a Plaquemine woman named Lestreonia Rodrigue on fraud charges. Applicants fraudulently obtained at least $16 million, per the Justice Department. 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. POGOs analysis of the first full years worth of Paycheck Protection Program fraud cases found that in at least: Some of these cases involve multiple defendants. New Orleans, Louisiana 70130. But it may be far greater than the fraud rate seen in the 2009 American Recovery and Reinvestment Act. The Department of Justice (DOJ) says as of Aug. 8, more than 5.2 million forgivable loans have been approved, at a total of more than $525 billion. To disguise the fraud, family members moved the proceeds through several bank accounts held in different names, according to the Justice Department. Thanks to the combined efforts of the SBA, the FBI, and IRS-CI, the defendants face prosecution., SBA-OIG Special Agent-in-Charge Amaleka McCall-Brathwaite said: Falsifying documents to fraudulently gain access to SBA program funds is unconscionable. The nonprofit MITRE Corporation found more than 85% of Paycheck Protection Program loan recipients did not indicate their race or ethnicity in their loan applications, Earlier this year, the Biden administration revamped the Paycheck Protection Program loan application to encourage self-reporting of demographic data and better illustrate the impact the PPP is having across various population segments. But the Small Business Administration acknowledged, as of late March, there is still limited demographic data on PPP borrowers.. My directive to SBA and to the Department of Justice will be to work with our state attorneys general, work with local DHS, work with local sheriffs, and make sure people understand if you steal money, these are these are finite resources, said Kennedy. Normally, the agency can require loan applicants to fill out a form allowing the agency to verify their tax information with the Internal Revenue Service. Seven of the approved loans were processed by Cross River Bank, a top Paycheck Protection Program lender that closely allied itself with financial technology firms. Eastern District of Louisiana In Louisiana, a federal grand jury recently indicted a Plaquemine woman named Lestreonia Rodrigue on fraud charges. Louisiana has a total of 217,332 businesses that received Paycheck Protection Program (PPP) loans from the Small Business Administration. Byron.Henderson@la.gov, On Friday, Feb. 12, LDR will begin accepting tax returns through, , the states free, electronic tax filing application; or through commercially available tax filing software. DAVID RAINES COMMUNITY HEALTH CENTER, INC. A Project On Government Oversight (POGO) review of court filings up to April 2, 2021, found that the charged individuals allegedly sought a total of nearly $445 million in Paycheck Protection Program loans. The Small Business Administration has released a list of businesses that have received emergency pandemic loans.. An Archdale man was arrested after authorities say he falsely received more than $1.5 million in COVID-19 relief money through the Paycheck Protection Program. Complaints can also be filed online here. In July, banks filed nearly seven times the average number of suspicious activity reports. 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. NEW ORLEANS, LOUISIANA United States Attorney Duane A. Evans announced today the indictment of SHARNAE EVERY (EVERY), age 27, of Houston, Texas, who was charged with one (1) count of Conspiracy to Commit Mail Fraud in violation of Title 18, United States Code, Section 1349 and two (2) counts of Mail Fraud in violation of Title 18, United States Code, Section 1341. This March, the Government Accountability Office added the Small Business Administrations emergency loan programs for small businesses to its biennial high-risk list of executive branch programs vulnerable to fraud, waste, abuse, and mismanagement, or that need transformation.. And these cases are just the beginning. PPP Loan Recipient List By State . Does something look fishy to you? U.S. Attorney's Office, Eastern District of Louisiana, Former Louisiana Woman Indicted for Preparing Over 110 Fraudulent PPP Loans Totaling Over $1.1 Million Dollars, 2_ecf_doc_1_-_sharnae_every_indictment_redacted_sanitized.pdf, Dr. Charles J. Southall, III Sentenced to 60 Months in Prison for Money Laundering, Obtaining Over $889,000 Through Fraud, New Orleans Man Sentenced for Theft and Sale of Motor Vehicle from Mississippi Car Dealership, Two More New Orleans Residents Sentenced in Staged Automobile Collision Scheme, Former Louisiana Woman Indicted For Preparing Over 110 Fraudulent PPP Loans Totaling Over $1.1 Million Dollars. Summary of PPP Loans in Louisiana. However, both Kennedy and Ricks say the good the program did far outweigh any possible fraud. Louisiana Department of Revenue Identity Theft Affidavit, Louisiana Workforce Commission Suspected Fraud Form. This interactive map provides a picture of the ranks of the unemployed at the national, state and county level. EVERY primarily used Cash App to receive the initial payments. Saintvils attorney declined to comment. This case was brought in New Orleans, Louisiana. If approved, the SBA pays the lender back using federal funds. At $367 billion, the amount of disaster funds provided through the EIDL COVID program is more than three times the amount of disaster loan funds approved for all disasters combined since the SBA was created in 1953, wrote Jovita Carranza, then-head of the Small Business Administration, in December 2020. Even if the Justice Department declines to join a case, the whistleblower and their private counsel can continue to pursue it. April 15, 2021. Inaccuracies in the data or missing data can undermine oversight. Click on a company's name to see additional loan details. BATON ROUGE, La. Have a question about Government Services? These cases further highlight the ways individuals appear to have taken advantage of lax oversight in the program. The involvement of a Small Business Administration employee in a pandemic loan fraud case raises questions about the agencys vetting of employees. judy norton children; court ordered community service california Businesses applying for a PPP loan must provide documentation to confirm that they have previously paid employees the compensation represented in the loan application. Not all those loans were necessarily fraudulently obtained. Pape and Jung used more than $3600 from the fraud scheme to pay for a stay at a resort in San Antonio, Texas, according to the Justice Department. According to an indictment, Sah submitted at least 15 fraudulent applications on behalf of at least 10 companies. Federal investigators cannot comment on active investigations or give an estimate on how much fraud may have occurred through federal pandemic relief programs, but a spokesperson for the U.S. Attorneys Office of the Middle District of Louisiana confirms there were fraudulent applications submitted in Louisiana through several relief programs including the PPP. Act 12 of the 2020 First Extraordinary Session of the Louisiana Legislature provided for a one-time $250 rebate for eligible workers earning $50,000 per year or less, who spent at least 200 hours responding to or mitigating the COVID-19 crisis from March 22, 2020, through May 14, 2020. Pursuant to the CARES Act, the amount of PPP funds a business is eligible to receive is determined by the number of employees employed by the business and their average payroll costs. All rights reserved. You can search the SBA's entire PPP loan data below. 3 Defendants Arrested For Over $13 Million Fraud Scheme To Obtain Loans Intended To Help Small Businesses During COVID-19 Pandemic 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 In fraud cases where there is no apparent misuse of a loan, civil enforcement may be more likely than criminal prosecution. NGUYEN and DAT HO will be presented in United States District Court for the Eastern District of New York in connection with these and other unrelated charges. 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. As the lending programs ramped up last summer, there was a spike in suspicious activity reports from banks and other lenders flagging potential fraud. Nearly a dozen of those people took out two loans. BATON ROUGE, La. According to the House Select Subcommittee on the Coronavirus Crisis, the SBA Office of Inspector General has received nearly 750,000 referrals of suspected identity theft related to the program over the last year. The prosecution of this case is being handled by the Offices Complex Frauds and Cybercrime Unit. According to the MITRE Corporation, a mismatched zip code or insufficient award description doesnt seem particularly egregious. & Does something look fishy to you? Complaints can also be filed online here. The defendants were arrested this morning. POGO has sought additional data from the Small Business Administration, and to improve data collection. During the programs first round, the Small Business Administration issued 5.2 million loans between April and August 2020. Many Paycheck Protection Program loans appear to have been issued to recipients who were not eligible under the programs rules. Both the outgoing Trump administration and the Biden administration appear to have learned lessons from the fraud that occurred in 2020. Sen. John Kennedy says in the rush to get help to people in need as quickly as possible, Congress didnt have time to build many safeguards against fraud into the program. That watchdog office has recommended that the agency use data analysis as a means to detect potentially ineligible and fraudulent applications.. He also opened bank accounts and lines of credit at financial institutions and credit card companies in the names of his elderly victims, according to the Justice Department. We are concerned only with actionable fraud. He added that, in selecting enforcement targets, we will follow the law, and we will not pursue companies that access CARES Act programs in good faith and in compliance with the rules.. The Justice Department has accused numerous defendants of using Paycheck Protection Program loans for unlawful purposes, such as purchasing private planes, sports cars, and taking pricey trips to Las Vegas casinos. Copyright 2020 WAFB. A check of Floridas Division of Corporations database would have revealed the companies had just been reinstated. AGs Office announces more than 50 arrests connected to Paycheck Protection Program fraud, LSU WR Malik Nabers arrested in New Orleans; prosecutors refuse to charge with condition, Mini workshop to bust myths surrounding sexual health, Experts give tips to prepare for daylight saving time, Health Minute: First at-home flu and COVID test authorized. 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