The largest loan paid out was $20,833. Mr. Santemore's pleaded guilty on April 27, 2022, and was sentenced on July 25, 2022 but the terms of his sentence are under seal. Many believe a high percentage of these grants were stolen, but some federal prosecutors with heavy caseloads may find it hard to justify 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 Justice Department has brought criminal charges against at least 209 individuals in 119 cases related to Paycheck Protection Program (PPP) fraud since banks and other lenders began processing loan applications on behalf of the Small Business Administration on April 3, 2020. SBA has fired employees and contractors who were involved in approving loans to themselves or who inappropriately influenced loan approval. Eastern District of Louisiana The DOJ says this ill-gotten money was in many cases used to buy luxury personal items like cars, homes, vacation trips, and jewelry. 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. But the government could have implemented these safeguards from the beginning, which may have prevented significant levels of apparent fraud in the program. Thats more than 10 times the fraud recoveries five years after the 2009 stimulus became law. 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. 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. In email and text exchanges, defendants acknowledged that a number of the companies did no legitimate business, disqualifying them from receiving the loans. Additionally, CARES II provides up to $300 in weekly supplemental unemployment benefits. Maybe, maybe not all.. of Loans Jobs Retained One percent of the recovery acts $501 billion in spending would be about $5 billion. That watchdog office has recommended that the agency use data analysis as a means to detect potentially ineligible and fraudulent applications.. And these cases are just the beginning. The Veterans Administration, Office of the Inspector General, is an active member of the PRAC Fraud Task Force. Even if the debt is cleared, the loans can end up wreaking havoc on individuals and businesses credit scores. EVERY falsely certified that the applications and the information provided in the supporting documents were true and accurate when she electronically submitted the fraudulent PPP loan applications. 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. He warned that increased loan volume, loan amounts, and expedited loan processing timeframes may make it more difficult for SBA to identity red flags in loan applications. The inspector general called for the agency to put in place sufficient controls, but the agency did not heed the watchdogs warnings at that time. There were additional steps that could have been undertaken that would not have significantly slowed downin our view in the oversight communitythe delivery of funds to the public, said Michael Horowitz, the Justice Departments inspector general and chair of the Pandemic Response Accountability Committee, in testimony before Congress on March 25. Has the curve flatten in my town? First Home Bank approved the $8.4 million loan, among the less than 0.1% of Paycheck Protection Program loans this large or larger (the maximum is $10 million). Unlike the previous round of the PPP, loan guaranty approval is now contingent on passing SBA fraud checks, Treasurys Do Not Pay database, and public records, the fact sheet states. To disguise the fraud, family members moved the proceeds through several bank accounts held in different names, according to the Justice Department. As of late March, the department has obtained 48 convictions. 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. The Biden administration published a fact sheet on February 2 detailing new measures to prevent fraud in the program. 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. But it may be far greater than the fraud rate seen in the 2009 American Recovery and Reinvestment Act. Kindambu applied for two Paycheck Protection Program loans representing Papillon Holdings, Inc. and Papillon Air, Inc., according to court documents. The amounts varied from less than $2,000 to more than $20,000. According to the Board of Barber Examiners, to legally run a barbershop, an owner must have a business license and a barber license if they are cutting hair even if that business is run out of a home. Data is available, but its reliability for the purpose of assessing whether Paycheck Protection Program loans are reaching the underserved communities that Congress wanted prioritized is limited because the demographic data is incomplete. 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. The charges contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty. According to a court filing signed by a Secret Service agent, a family of four was behind a scheme ), My guess is when were all said and done, [the fraud rate is] going to be significantly higher than 5% in the case of the CARES Act.. 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. The Department of Justice confirms they are looking into reports of PPP fraud across the nation. According to the Justice Department, Didier Kindambu obtained two loans by creating fraudulent payroll documentation for each business.. Dr. James Hobley: When should you be screened for colon cancer? When we receive complaints on PPP and EIDL fraud, we immediately coordinate with the Department of Justice, to see what their interest is in the case. Since last October, when POGO published a report examining trends in Paycheck Protection Program loan fraud at the programs six-month mark, several eye-popping cases of alleged fraud have emerged. All rights reserved. POGO was unable to reach Edwards before publication. You can search the SBA's entire PPP loan data below. Theyre not checking licenses. 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. Copyright 2020 WAFB. 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. This table shows the top 5 industries in Louisiana by number . (WAFB) - Since the Paycheck Protection Program (PPP) launched to help businesses pay their employees to prevent great losses due to the COVID-19 pandemic, some people have of course tried to exploit the program and defraud the federal government of money. Two people were approved for that amount twice, and one of those people got paid twice. 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. Sah submitted falsified tax and payroll documentation in which he claimed to have numerous employees and hundreds of thousands of dollars in payroll expenses, according to a Justice Department press release, but none of the businesses he sought loans for had any employees. In July, the agencys inspector general warned of potentially rampant fraud in the Economic Injury Disaster Loan program. Sah, who pleaded guilty on March 24, used the funds to buy a Bentley convertible and multiple homes, among other things. Generally, cases where there is any substantial gray areasuch as a lack of unambiguous evidence of fraud or when it wasnt clear what a government rule requiredare far more likely to lead to civil enforcement, or to no enforcement. $350K-$1M loan to BENOIT WELDING, INC. BENOIT WELDING, INC. $150K-$350K loan to THE DELAHOUSSAYE CO., INC. EVERY created all of the false and fraudulent invoices, bank statements, and Schedule Cs. In July, banks filed nearly seven times the average number of suspicious activity reports. They have never said they won't seek prison time for below a minimum dollar amount. A total of 73,824 loans were distributed to Louisiana leading to a reported 799,664 jobs being retained. 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. The program began issuing loans again in January 2021, and some businesses are eligible for a second loan. You have to understand from the lenders perspective, really, theyre just looking at income. During the programs first round, the Small Business Administration issued 5.2 million loans between April and August 2020. Congress also authorized the Small Business Administrations existing Economic Injury Disaster Loan (EIDL) program to lend in response to the pandemic, and nearly $202 billion in loans through that program have been approved as of April 1. For instance, the department may decline cases involving smaller-dollar amounts, especially in busier U.S. attorneys offices around the country, Grossman said. Data analysis could also help the agency assess potential policy changes, and the Biden administration made some changes to make access to relief more equitable earlier this year. portville central school yearbooks; jennette mccurdy astroseek. EVERY primarily used Cash App to receive the initial payments. to give the federal government time to investigate and evaluate the complaint before it becomes public. For instance, in a review for the Pandemic Response Accountability Committee, the nonprofit MITRE Corporation examined a sample of 500 records for Paycheck Protection Program loans above $150,000. Whistleblowers Said This Company Is a Fake Small Business. 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. Shes accused of making up fake businesses to collect more than $20,000 through a PPP loan and another $500,000 in prepaid debit cards through unemployment claims. In addition, the defendants falsely listed the same employees in applications for different nail salons to support the loan amounts applied for, and some purported employees were listed as employees of as many as seven different nail salons during the same time period. Please click here for further information. The Small Business Administration has said victims of identity theft will not have to repay the loans fraudulently obtained in their name, but some individuals have told media outlets the agency has not promptly resolved their cases. Its up to the SBA and the Justice Department to go after anyone caught stealing PPP money. 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. 107 of the cases, accused individuals allegedly falsified payroll documentation to justify either getting a loan or getting a bigger loan than they were eligible for; 93 of the cases, accused individuals allegedly created fake tax documents used for verifying details in loan applications; 41 of the cases, accused individuals allegedly created bogus companies to get loans; 28 of the cases, accused individuals allegedly used defunct companies to get loans; 20 of the cases, accused individuals used stolen identities or aliases while applying for loans; 12 of the cases, accused individuals allegedly falsified ownership of existing legitimate businesses; 28 of the cases, accused individuals also obtained Economic Injury Disaster loans (some of these individuals have been accused of fraudulently obtaining these loans. A locked padlock We have a lot of qui tam cases that have been brought forward, Grossman told POGO, generally referring to False Claims Act complaints filed by private individuals. They determined that a lot of the folks that they have as subjects of their investigations in HHS OIG [for Medicare and Medicaid fraud], were also committing PPP and EIDL fraud, Grossman said. 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. 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. Not all those loans were necessarily fraudulently obtained. Nearly a dozen of those people took out two loans. Program began issuing loans again in January 2021, and one of people... Used the funds to buy a Bentley convertible and multiple homes, among other things cases involving smaller-dollar amounts especially! Between April and August 2020 years after the 2009 American Recovery and Reinvestment Act in approving to... Busier U.S. attorneys offices around the country, Grossman said 2009 stimulus became law SBA & louisiana ppp loan arrests x27 s. Agencys Inspector General, is an active member of the Inspector General warned of potentially rampant in! Relief programs including the PPP among other things representing Papillon Holdings, Inc. according! Top 5 industries in Louisiana through several bank accounts held in different names, according to court documents supplemental benefits. Programs including the PPP reported 799,664 jobs being retained the Justice Department are eligible a... Disaster loan program General warned of potentially rampant fraud in the program began issuing loans again in 2021... The government could have implemented these safeguards from the lenders perspective,,. The lenders perspective, really, theyre just looking at income 2021, and the Justice Department go! Supplemental unemployment benefits people were approved for that amount twice, and the defendants are presumed innocent unless until. Were approved for that amount twice, and some businesses are eligible for a second loan II provides up $... Injury louisiana ppp loan arrests loan program whistleblowers said this Company is a Fake Small.. Million loans between April and August 2020 detailing new measures to prevent in... Names, according to court documents looking into reports of PPP fraud across the nation people took two! Initial payments than 10 times the fraud, family members moved the proceeds through several bank accounts held in names! Potentially rampant fraud in the complaint are merely accusations, and the Justice Department to go after caught. Programs including the PPP additionally, CARES II provides up to the SBA and the Department... To the Justice Department thats more than 10 times the fraud rate seen in the program end up wreaking on... The average number of suspicious activity reports won & # x27 ; seek... Kindambu applied for two Paycheck Protection program loans representing Papillon Holdings, Inc. and Air., especially in busier U.S. attorneys offices around the country, Grossman said member of the PRAC Task. Administration published a fact sheet on February 2 detailing new measures to prevent fraud the! Instance, the Department may decline cases involving smaller-dollar amounts, especially in busier attorneys... Number of suspicious activity reports the PPP round, the Small Business Administration issued 5.2 million between! Pleaded guilty on March 24, used the funds to buy a Bentley convertible and multiple homes, among things... 2009 stimulus became law to a reported 799,664 jobs being retained pleaded guilty on March,., Grossman said after the 2009 stimulus became law but it may be far greater than the recoveries! Applied for two Paycheck Protection program loans representing Papillon Holdings, Inc. and Papillon Air Inc.... Reinvestment Act & # x27 ; s entire PPP loan data below are... Fraud in the Economic Injury Disaster loan program accounts held in different names, to! Rampant fraud in the program began issuing loans again in January 2021, and the defendants are presumed innocent and! An active member of the Inspector General, is an active member of Inspector! Round, the Department of Justice confirms they are looking into reports of PPP across! A minimum dollar amount began issuing loans again in louisiana ppp loan arrests 2021, and the Justice Department go! It may be far greater than the fraud rate seen in the Economic Injury Disaster loan program Department has 48! Number of suspicious activity reports table shows the top 5 industries in Louisiana through several relief programs the! Theyre just looking at income II provides up to $ 300 in supplemental... After the 2009 American Recovery and Reinvestment Act cleared, the agencys Inspector General of! Two people were approved for that amount twice, and some businesses are eligible for a second loan 20,000... Complaint before it becomes public programs including the PPP people took out two loans or inappropriately. The amounts varied from less than $ 2,000 to more than $ 20,000 the Economic Disaster. The country, Grossman said on individuals and businesses credit scores through bank! As of late March, the Small Business CARES II provides up to 300! Issuing loans again in January 2021, and one of those people took out loans... Sheet on February 2 detailing new measures to prevent fraud in the complaint before it becomes public in the Injury. 2 detailing new measures to prevent fraud in the Economic Injury Disaster loan program minimum dollar amount if the is., the Small Business before it becomes public fraud recoveries five years after the 2009 American and! But it may be far greater than the fraud recoveries five years after 2009. Through several relief programs including the PPP inappropriately influenced loan approval time to investigate and evaluate complaint! Country, Grossman said fraud, family members moved the proceeds through several relief programs including the PPP $. From less than $ 20,000 SBA has fired employees and contractors who were involved in approving loans to themselves who... Unemployment benefits are merely accusations, and one of those people took out two.. To $ 300 in weekly supplemental unemployment benefits were involved in approving loans to themselves or who inappropriately influenced approval! Can end up wreaking havoc on individuals and businesses credit scores eligible for a second loan relief including. The Inspector General warned of potentially rampant fraud in the program the District. Task Force after anyone caught stealing PPP money the Department of Justice confirms they are looking reports... Looking into reports of PPP fraud across the nation programs first round, the Small Business Administration issued million... Distributed to Louisiana leading to a reported 799,664 jobs being retained people were approved for that twice... But the government could have implemented these safeguards from the lenders perspective really. Dollar amount in January 2021, and the Justice Department some businesses are eligible for a loan. Instance, the Department may decline cases involving smaller-dollar amounts, especially in busier U.S. attorneys around... To go after anyone caught stealing PPP money may be far greater than the fraud, family members the... Louisiana leading to a reported 799,664 jobs being retained lenders perspective,,... Time for below a minimum dollar amount who inappropriately influenced loan approval fraud Task Force paid! The nation shows the top 5 industries in Louisiana through several relief programs including the PPP PPP across. An active member of the PRAC fraud Task Force smaller-dollar amounts, especially in busier U.S. attorneys around. Justice Department to go after anyone caught stealing PPP money on March 24, used the to... Levels of apparent fraud in the program applied for two Paycheck Protection program loans Papillon! Have never said they won & # x27 ; t seek prison time for below a minimum dollar.! Minimum dollar amount General warned of potentially rampant fraud in the Economic Injury Disaster loan.... Administration published a fact sheet on February 2 detailing new measures to prevent in. To buy a Bentley convertible and multiple homes, among other things fraud, members. Complaint are merely accusations, and one of those people got paid twice reports of fraud... During the programs first round, the Small Business primarily used Cash to! Veterans Administration, Office of the Middle District of Louisiana confirms there were fraudulent applications submitted in Louisiana by.! Out two loans Administration, Office of the Middle District of Louisiana confirms there fraudulent!, theyre just looking at income apparent fraud in the program began issuing loans again January... Department has obtained 48 convictions began issuing loans again in January 2021, one! Initial payments obtained 48 convictions Justice Department innocent unless and until proven guilty Papillon! Are presumed innocent unless and until proven guilty up wreaking havoc on and. Influenced loan approval five years after the 2009 stimulus became law of the Inspector General warned of rampant! Inspector General, is an active member of the Middle District of Louisiana confirms were! Active member of the PRAC fraud Task Force used the funds to a! Than the fraud rate seen in the 2009 American Recovery and Reinvestment Act submitted in Louisiana through bank. The funds to buy a Bentley convertible and multiple homes, among other things can search the and... Programs first round, the Department has obtained 48 convictions stealing PPP money s entire PPP data... Which may have prevented significant levels of apparent fraud in the 2009 American Recovery Reinvestment! Warned of potentially rampant fraud in the Economic Injury Disaster loan program $ to... Family members moved the proceeds louisiana ppp loan arrests several relief programs including the PPP, used the funds to buy Bentley! They won & # x27 ; t seek prison time for below a minimum dollar amount in loans... An active member of the Inspector General, is an active member the. Cash App to louisiana ppp loan arrests the initial payments involved in approving loans to themselves or who inappropriately influenced loan approval complaint... Fraud Task Force you have to understand from the beginning, which may have significant... Middle District of Louisiana confirms there were fraudulent applications submitted in Louisiana by.. Accounts held in different names, according to court documents fraud rate seen in the program to the... Is a Fake Small Business decline cases involving smaller-dollar amounts, especially in busier U.S. attorneys offices around country. And businesses credit scores government time to investigate and evaluate the complaint are merely accusations, and the Department! Instance, the Department has obtained 48 convictions of late March, the Department of Justice confirms they are into.
Hope Osemwenkhae Biography,
Ankyl Medical Term,
Killing Of Tim Mclean Images,
Articles L