Our mission is to bring you "Small business success delivered daily.". Inadequate or questionable documentation submitted in support of a request for PPP loan forgiveness is another huge red flag, and companies accused of submitting fraudulent forgiveness requests can face a variety of federal charges.. Learn about careers at Cox Media Group. Owners of Chain of Nail Salons (New York December 10), 71. For a quick overview, this infographic tells the story of what happens when the funds are misused in a PPP loan fraud. Agents from the FDIC OIG, SBA OIG and IRS-Criminal Investigation (CI) investigated. At the time of his arrest Hayford was a Project Manager for Walmart. A few individuals will be arrested stripped of their material things. A former Georgia mayoral candidate in charge of a nonprofit claiming to assist low-income families spent $323,000 in loans she received from the Paycheck Protection Program (PPP) on an in-ground . A PPP loan is a Small Business Authority-backed loan that helps businesses keep their workforce employed during the COVID-19 crisis. Tonye Johnson was also charged with getting a PPP loan of $389,627and paying a portion of the loan proceeds to his co-conspirators. Luckily, the Feds have recovered a large part of the loan proceeds already, although millions is forever gone. Allegedly he submitted fake IRS 1099 Forms containing worker social security numbers that were invalid. Well at least the Feds got that back. Andre Lee Gaines, 67, of Dallas - pleaded guilty on June 17, 2021 to one count of making false statements to the FBI in connection with the loan obtained by his business, Gaines Reservation and Travel. Acting U.S. Attorney Audrey Strauss said, Goyal allegedly looted over $630,000 in federal funds earmarked for legitimate small businesses in dire financial straits.. Fraudsters like Benjamin Hayford greedily steal money that should be going to Americas small business owners who are struggling during this public health crisis, said U.S. Attorney Trent Shores. 1343) and making false statements to the SBA and FDIC-insured banks (18 U.S.C. Three-State Ring (Georgia, Ohio and California August 6), 32. Georgia and South Carolina Fraud Ring with 11 People (Georgia, January 28, 2021). "Along with our federal, state and local law enforcement [] The former manager of the San Francisco Hilton allegedly embezzled from the hotel in a kickback scheme going back to 2013. In order to get Paycheck Protection loans forgiven and not have to repay the loan, owners have to show proof that at least 60% was used for payroll and the rest for other permitted expenses. Stephen J. Cox, the U.S. Attorney for the Eastern District of Texas, wrote in an op-ed in Texas Lawyer: Rest assured that we will be careful not to discourage legitimate businesses from accessing the important financial resources that Congress made available through the CARES Act. Depending on the charges, penalties could include up to $1 million in fines and up to 30 years in prison, legal experts say. Rahul Shah of Evanston is charged with bank fraud and making false statements to a financial institution. Thats a great point, Alex! The Justice Department is hot on their trail. Here are 10 red flags for PPP loan fraud: Companies are required to make a number of affirmative representations during the PPP loan application process. Robert, youre probably right about finding fraud for years to come. You can also check to see how many workers companies receiving the assistance said they kept on the payroll. Ten people indicted in Metro Atlanta, Houston and D.C.-Maryland area on federal fraud charges for false CARES Act applications. Lola Shalewa Barbara Kasali, 22, of Houston was charged with several counts in which she allegedly received more than $1.9 million for two companies, including Charm Hair Extensions. Michael George McQuarn, 51, of Austin, is charged with with fraudulently receiving over $2 million in Small Business Administration loans for two fictitious companies, Vantastic Voyages, LLC and Happy Days Movers, LLC. Three people she allegedly claimed as staff told investigators they never heard of her company. Keith William Nicolettawas charged with seeking more than $1.9 million in a Paycheck Protection Program loan to pay employees of a scrap metal company when, in fact, he had paid no payroll taxes for employees. Defunct Chicago Restaurateur (Illinois August 28), 42. One local businesswoman told me she prayed for two weeks before applying because of her fears over confusing requirements. The estimated amount was about. These Local Counsel may assist the Firm on a case-by-case basis, operate their own respective law firms, are independent of Firm, and are not partners, owners, of counsel, or employees of Firm. Some of them operated as crime rings as part of the PPP loan fraud schemes they were committing. Sutukh El even posted a rap video holding a large amount of $100 bills after he had made a cash withdrawal, having received this $600,000 plus. Government officials have seized more than $400,000. Loot paid for with PPP loan money included two Lamborghini Huracan sports cars, a Rolex Presidential watch, a 5.73-carat diamond ring, a diamond bracelet, two Tesla cars, a 26-foot Pavati Wake Boat, a 33-foot Cruiser yacht, two Rolls-Royces, a Lamborghini Urus luxury SUV, a Kia Stinger, a Ford F-350 pickup truck, at least three Bentleys, and an assortment of other pricey vehicles and boats. Charles Petty a/k/a Charles Knight, 48, of Atlanta, Georgia, is charged with conspiracy to commit bank fraud and wire fraud, bank fraud, wire fraud, false statements to a federally insured financial institution, and money laundering in connection with the loan obtained by Transportation Management Services Inc. Jerry Baptiste, 43, of College Park, Georgia, is charged with conspiracy to commit bank fraud and wire fraud, bank fraud, wire fraud, false statements to a federally insured financial institution, and money laundering in connection with the loan obtained by Transportation Management Services Inc. Derek Parker, 56, of Rochester Hills, Michigan, is charged with conspiracy to commit wire fraud, wire fraud, and money laundering in connection with the loan obtained by his business, D Parker Holdings Inc. David Belgrave II, 49, of Lexington, South Carolina, is charged with conspiracy to commit bank fraud and wire fraud, bank fraud, wire fraud, false statements to a federally insured financial institution, and money laundering in connection with the loan obtained by his business, Continuing Success Inc. Charles Hill IV, 45, of Norcross, Georgia, is charged with conspiracy to commit wire fraud, wire fraud, and money laundering in connection with the loan obtained by his business, Infinite Education Services Inc. Ryan Whittley, 35, of South Holland, Illinois, is charged with conspiracy to commit wire fraud, wire fraud, and money laundering in connection with the loan obtained by his business, ML Exotic Customs Inc. El Hadj Sall, 39, of Jacksonville, Florida, is charged with conspiracy to commit wire fraud, wire fraud, and money laundering in connection with the loan obtained by his business, Bellevie Corp. Rick McDuffie, 50, of Little Rock, South Carolina, is charged with conspiracy to commit wire fraud and wire fraud in connection with the loan obtained by his business, Mickies Auto and Tire LLC. He got $5.6 million and sent hundreds of thousands of dollars to Pakistan accounts, and paid for luxury items. Claims of employees who didnt exist. Lavanture allegedly went on a spending spree and bought a motel and also an 8.54-acre estate with a Tuscan-style mansion on it. Two Miami neighbors, Latoya Stanley and Johnny Philus, are charged with getting more than $1 million in Economic Injury Disaster Loan and PPP loan amounts. Michael C. Moller was charged with fraudulently seeking $4.7 million in PPP forgivable loan that he applied for in the name of various people including his father, girlfriends brother and girlfriends son. Denesseria Slaton, pleaded guilty on June 16, 2021 to one count of conspiracy to commit bank fraud and wire fraud in connection with the loan obtained by Transportation Management Services Inc. Slatons sentencing is set for October 6, 2021. Kenneth Gaughan is charged with obtaining over $2.1 million in PPP and Economic Injury Disaster Loan funds. These purposes include the payment of payroll and related expenses, the payment of insurance premiums, the payment of rent and mortgage interest under pre-existing obligations, and the payment of business utility bills. The attempted fraud is staggering: $341,000,000 through January 2021. Around 1.8 million of the PPP's 11.8 million loans showed signs of fraud, according to an academic working paper cited by The New York Times. Applied for PPP Loan While out on Bail (Tennessee November 9), 64. On March 27, 2020, Congress passed and President Trump signed into law the Coronavirus Aid, Relief, andEconomic Security(CARES)Act authorizing the low-interest, forgivable loans. The allegations say he submitted fake IRS documentation. Thomas is from Duluth. He allegedly bought a 2020 Mercedes and a special edition Ford F-250 pickup truck, and wired $537,000 to a property management company in south Florida. Man Under Indictment (Wisconsin July 8), 21. She deposited the proceeds into four bank accounts, but that didnt hide it from authorities who seized her ill-gotten gains. McQuarn allegedly used the cash for personal use including buying a 26-foot Pavati Wake Boat and a Rolls Royce. Darryl Washington, 66, of Atlanta, Georgia. Brandon Casutt of Henderson, Nevada, is charged with EIDL and PPP fraud to the tune of $500,000. He also agreed to forfeit various assets, including more than $2.1 million in seized funds, three luxury vehicles a 2018 Mercedes-Benz S-Class S65AMG, a 2018 Land Rover Range Rover, and a 2017 Acura NSX and several items of jewelry, including a gold Rolex. Subsequently, upon receiving PPP loans (or, ideally, in anticipation of receiving a PPP loan), companies should adopt policies and procedures that are designed to ensure continual PPP compliance. NFL player Joshua Bellamy was charged for his alleged role as part of a $24 million COVID-Relief scheme. He will just out of prison. Ngoc Manh Nguyen, Victoria Dieuy Ho, and Dat Tat Ho were charged for allegedly having misrepresented employee payroll figures to receive $13 million in COVID-19 loan funds. According to the SBA, the Paycheck Protection Program ended on May 31, 2021. David T. Hines of Miami is charged with fraudulently seeking $13.5 million in PPP funds using false statements about various companies payroll expenses. He allegedly blew through about $200,000 in Las Vegas casinos, where he was caught on surveillance cameras at a Bellagio blackjack table. Bern Benoit, 45, of Burbank, California, pleaded guilty on March 11, 2021 to one count of conspiracy to commit bank fraud and wire fraud in connection with the loan obtained by his business, Transportation Management Services Inc. Benoits sentencing is set for September 8, 2021 before Judge J.P. Boulee. Law enforcement assisting in the investigation included the Small Business Administration OIG office, the FBI, FDIC and others. He allegedly lied about his criminal past, and submitted fake tax documents including names of people who did not work for the businesses. Forged account statements. Related:Why the Small Business Administration loan program frustrates borrowers, Previous PPP stories:More than 5,000 PPP loans, totaling more than $200m, approved in Clarke County, Database: Click here to search our PPP loan database. Mohan Mukand, who used to work for Microsoft and Amazon according to his LinkedIn profile, is charged with submitting 8 PPP applications on behalf of six companies. Sum of Initial Approval Amount. Atlanta, GA 30303-3309. Many cases involve forged IRS filings one of the easiest things for the government to check. This station is part of Cox Media Group Television. Steven R. Goldstein and his business partner, Raymond Magana are charged with applying for $2.5 million in loans and actually receiving over $1.95 million. For federal authorities such as the SBA-OIG and the DOJ, this includes suspect activity from any and all company personnel who are involved in responding to the governments inquiry; and, for companies, this includes evasiveness from employees during internal PPP compliance investigations. Whoa! Dinesh Sah of Dallas was indicted on charges he filed 15 fraudulent loan applications to 8 lenders in the total amount of $24.8 million. Vegas Business Owner (Nevada August 13), 37. Authorities allege he used the money to buy a $1 million home and pay for $30,000 in home improvements. The government issued a seizure warrant for a Mercedes Benz SUV and more than $500,000 from a bank account. The impact of COVID-19 on small businesses around the country has been devastating, said Acting U.S. Attorney Kurt R. Erskine. If so, how do I go about it? Official websites use .gov Andre Gainess sentencing is set for October 6, 2021 before Judge J.P. Boulee. References to a particular city or state other than Dallas, Houston, and Texas in any article or anywhere on this website does NOT mean that Firm maintains an office in that location, and it does NOT mean that Firm has attorneys physically located in that city or state. When Williams received the funds, he allegedly tried to launder the money by transferring it to different accounts. Our focus is on fraud.. A locked padlock The borrower gets the PPP loan funds into their bank account. Samuel Yates of Maud, Texas is charged with fraudulently applying for $5 million with two different lenders. A Bentley Convertible and a Jaw Dropping Scheme (Texas October 9), 58. Azhar Sarwar Rana, 30, of Newton, New Jersey, was charged for submitting a fraudulent application for a real estate development company, and falsified payroll data. He allegedly squandered thousands at strip clubs and nightclubs. Fraudulent Loans List :: PPP Detective Fraudulent Loans List These loans have been flagged by other users as potentially being fraudulent. While this information may constitute attorney advertising in some jurisdictions, merely reading this information does not create an attorney-client relationship. The defendants are accused of submitting at least 14 fraudulent loan applications around April-August 2020 in attempts to get more than $14.7 million, the DOJ said. The government wisely decided to move fast and let the justice system track down any miscreants. After receiving the loans, he bought a $480,000 , spent $50,000 to $200,000 on a lost gambling bet, bought a brand new speedboat worth about $150,000, he also bought Martina D****la a $900 pair of shoes for her 23rd birthday. Ahmad Kanan, formerly of Madison, is charged with wire fraud and money laundering. He was arrested after he booked a same-day flight to Pakistan. She allegedly submitted fake IRS form 940 filings (showing employment taxes claimed to be paid) for her company, Heavenly Tahoe Properties. Phillip J. Augustin of Coral Springs, Florida, is accused of using his talent management agency and connections with professional athletes to engage in an alleged fraud of breathtaking scale, involving 90 PPP loan applications and $17.4 million. Lastly, along with all of the red flags for PPP loan fraud discussed above, there are various other issues that can tip off federal authorities during audits and investigations as well. A PPP loan is a Small Business Authority-backed loan that helps businesses keep their workforce employed during the COVID-19 crisis. All rights reserved. Part of the scheme allegedly involved a cystic fibrosis foundation he ran, called Skylar CF Foundation. Former Police Officer Sentenced For Money Laundering. Martin Kao, the CEO of Navatek LLC (now known as Martin Defense Group LLC), was charged in a federal complaint with fraudulently obtaining $12.8 million in CARES Act loans. Its intended to offer news and peer perspective on an important issue that affects us as business owners. NINETY-NINE (99%) percent will NOT need to worry and lose sleep and that is because, The U.S. Small Business Administration is a United States government agency. Ronald Bell, who conspired to extort money from Georgia Institute of Technology, has pleaded guilty to a charge of conspiracy to commit extortion. This is the latest in an onslaught of PPP fraud cases in Georgia and across the U.S. . However, in conjunction with the submission of an EIDL application, by having clicked on and checked a box within the on-line application, an applicant could request and then receive up to $10,000.00, an EIDL Advance which did not have to be repaid. IRS-CI will continue to help illuminate these criminal deeds with our financial expertise., The Treasury Inspector General for Tax Administration aggressively pursues those who endeavor to defraud programs afforded to the American people under the CARES Act, said J. Russell George, the Treasury Inspector General for Tax Administration. But it may not take that long. Fewer than 150 defendants out of of over 5.2 million loans is a minuscule percentage. Share sensitive information only on official, secure websites. Argires allegedly filed two fraudulent PPP applications seeking $1.1 million in forgivable funding. is headquartered in Dallas, Texas and it only maintains a fully equipped office in Dallas and Houston. I was eventually permanently laid off at the end of June. The Justice Department alleges that George submitted identical wage information and employee count records for two separate companies, one of which was out of business since 2015. 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