But in the year since the CARES Act became law, it has received nearly 150,000 hotline complaints, representing a 19,500% increase over prior years, according to a staff memo from the House Select Subcommittee on the Coronavirus Crisis. For instance, in one larger case, the Justice Department has charged 19 individuals to date. Both programs lacked basic anti-fraud safeguards and the Small Business Administration exercised insufficient oversight, according to the agencys watchdog, the Government Accountability Office, and congressional committees that have investigated the programs. Even if the debt is cleared, the loans can end up wreaking havoc on individuals and businesses credit scores. are moving. 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. If Congress amends the underutilized Program Fraud Civil Remedies Act, efforts by inspectors general to fight fraud in pandemic related spending would be enhanced, according to Horowitzs testimony. EVERY received these funds into her Current account, her Cash App account, or into her boyfriends Current account. We hear reports of arrests and arraignments for PPP loan cases involving only $10,000 or $15,000. In less than six months, more than 50 people have been charged with allegedly committing fraud in connection with the program. In one of the most complex cases to emerge since POGOs original analysis, at least seven individuals were indicted in a scheme that allegedly involved over 80 applications seeking a total of $30 million in Paycheck Protection Program loans. This interactive map provides a picture of the ranks of the unemployed at the national, state and county level. Barbershops were one of the most common businesses to apply. The largest loan paid out was $20,833. Buried within the court filing are allegations that Greenberg bribed an unnamed Small Business Administration insider to fraudulently obtain nearly $433,000 in Economic Injury Disaster loans. If approved, the SBA pays the lender back using federal funds. 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. According to an indictment, Sah submitted at least 15 fraudulent applications on behalf of at least 10 companies. Faa sua busca no site. Theyre not checking licenses. An estimated 1% of that 2009 stimulus was lost to fraud (some claim the rate is even lower than that). Who in Louisiana got Paycheck Protection Program loans during the pandemic? In July, the agencys inspector general warned of potentially rampant fraud in the Economic Injury Disaster Loan program. Babysitter arrested after 5-year-old fatally shot by 6-year-old cousin. Published 8:46 am Sunday, September 11, 2022 . Compare the spread of the infection with other areas in the U.S. 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. 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. In other words, lenders and the Small Business Administration did not prevent the alleged fraud in these instances before taxpayer dollars went out the door. Under the Coronavirus Response and Relief Supplemental Appropriations Act, passed as part of the Consolidated Appropriations Act of 2021, (CARES II), individuals began receiving automatically a second round of Economic Impact Payments of up to $600 for individuals or $1,200 for married couples and up to $600 for each qualifying child beginning in December. 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. 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. The disaster loan programs strongest internal control is the ability to receive directly from the IRS recent tax transcripts, wrote James Rivera, head of the SBAs Office of Disaster Assistance, last fall. Nick Schwellenbach Ms. Strauss praised the investigative work of the SBA-OIG, FBI, and IRS-CI, and noted that the investigation remains ongoing. Summary of PPP Loans in Louisiana. Too often those who fraudulently divert tax dollars in amounts below what is typically accepted by prosecutors are not fully held accountable, impacting agency programs and leaving the taxpayer footing the bill, he wrote. 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. However, industry insiders say the barbershop industry is largely cash-based, making it easy to operate under the radar. IRS-Criminal Investigation remains dedicated to working with our law enforcement partners to ensure that these types of fraud are investigated and the offenders are punished to the fullest extent of the law.. 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. 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 payments are refundable tax credits and are not considered taxable income for federal or state tax purposes. In addition to helping head off further fraud, conducting robust data analysis could also help the Small Business Administration assess how well its relief programs are reaching small businesses in underserved communities, such as those owned by people of color. Unfortunately, the owners of Victoria Nails & Spa saw this program as their own personal piggy bank. 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. 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. One percent of the recovery acts $501 billion in spending would be about $5 billion. A check of Floridas Division of Corporations database would have revealed the companies had just been reinstated. The rebates, funded by the CARES Act, are subject to Louisiana state income tax. 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. Showing 50 of 9,060 results. 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. EVERY prepared and submitted false and fraudulent PPP sole proprietor loan applications via various online portals including, but not limited, to Blueacorn. But, in the Economic Injury Disaster Loan program, the Small Business Administration has not conducted robust data analysis to find instances of loans and grants that may have been fraudulently obtained, according to the Government Accountability Office. UNION VETERINARY CLINIC, INC. 65780. The Department of Justice, and in particular my office here in the Middle District of Louisiana, is committed to investigating and prosecuting those who abuse the system for personal gain and will use every resource at our disposal to protect those federal dollars and the businesses they are intended to help. 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. But, in contrast to the False Claims Act where the reward is a minimum 10% of the recovery, FIRREAs whistleblower reward is capped at $1.6 million. Other government agencies also submit referrals of potential fraud to the office of inspector general, and suspicious activity reports come in through the financial industry by way of the Treasury Department. 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. Louisiana Workforce Commission Suspected Fraud Form. If you look at the last round [of PPP] and you look at it on a time series, it almost looks like the largest businesses and businesses in high-income neighborhoods received money first and smaller businesses and businesses in low-income neighborhoods received money last, the Small Business Administrations Michael Roth told Politico in March. 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. PPP Loan Recipient List By State Louisiana 217,332 TOTAL PPP LOANS $12.2B TOTAL LOAN AMOUNT $56,095 AVERAGE PPP LOAN 6 AVG COMPANY SIZE Louisiana has a total of 217,332 businesses that received Paycheck Protection Program (PPP) loans from the Small Business Administration. 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. Not all those loans were necessarily fraudulently obtained. In the three decades since the laws passage, there have been only six whistleblower settlements involving FIRREA, yielding $19.9 billion in recoveries, but only $9.3 million in rewards to whistleblowers, according to Whistleblower Network News. An October inspector general report states that SBA has fired employees and contractors who were involved in approving loans to themselves or who inappropriately influenced loan approval. The Small Business Administration did not respond to questions, but a spokesperson for the agencys inspector general told POGO that we are aware of one employee and two contractors who have been fired for these reasons. Has the curve flatten in my town? An attorney for Aqeel, Tommy T. Mingledorff, told POGO by email that these allegations are denied. 66625. So were trying to reverse that. 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. However, both Kennedy and Ricks say the good the program did far outweigh any possible fraud. The Justice Department brought civil claims against the company under both the False Claims Act and Financial Institutions Reform, Recovery and Enforcement Act. To disguise the fraud, family members moved the proceeds through several bank accounts held in different names, according to the Justice Department. According to court records, Amir Aqeel and several others in the Houston area allegedly created fake tax and payroll documentation in exchange for large kickbacks for referring others into the scheme that involved 12 corporate entities. SOUTHERN MAGNOLIA LANDSCAPING LLC. In addition to allegedly submitting a fraudulent PPP loan application for a fictious [sic] business in his own name, Saintvil also allegedly stole the identities of eight elderly individualsseven of whom were residents of senior living facilities and one who was related to him, according to a Justice Department press release. Normally, our agents work a contract or procurement fraud case those can take several years to investigate, Grossman said. You know, is it something that they should have done? Eastern District of Louisiana POGO has sought additional data from the Small Business Administration, and to improve data collection. However, a check of public records for business licenses with the Secretary of State office revealed no active business licenses for those eight individuals. EVERY then charged approximately $3,500.00 once the loans were funded. 217,332 TOTAL PPP LOANS. And there is a lot of gray area in the Paycheck Protection Program, partly because the Small Business Administrations rules for the program changed repeatedly and were unclear, and because Congress created loose criteria for loan eligibility and allowed applicants to self-certify their information. Maurice Kamgaing, 41 sent PPP loan . And this is not the only case. Mr. Aqeel asserts his presumption of innocence and demands the United States prove their allegations beyond a reasonable doubt. Mingledorff also said, The case is in the pretrial phase of litigation. (212) 637-2600, Human Trafficking & Child Sexual Exploitation, Department of Justice Harassment Prevention Resource, Download Ngoc Manh Nguyen et al. All rights reserved. Loan Range No. More due diligence on the part of lenders or the Small Business Administration could have prevented at least some instances of fraud. The prosecution of this case is being handled by the Offices Complex Frauds and Cybercrime Unit. The lender got to keep a fee based on the size of the loan. Some of these qui tam lawsuits are traditional whistleblower cases, but others involve individuals who are slicing and dicing the data that has been made available about loans, according to Grossman. Byron Henderson Does something look fishy to you? PPP Loans in Raceland, LA - Page 13. But it may be far greater than the fraud rate seen in the 2009 American Recovery and Reinvestment Act. 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. A lock ( Maybe, maybe not all.. Your Address, Corporation Income/Franchise Extension Request. Report it to the Small Business Administrations with just a few clicks. She's accused of making up fake businesses to collect more than $20,000 through. For instance, the department may decline cases involving smaller-dollar amounts, especially in busier U.S. attorneys offices around the country, Grossman said. Todays Internet search for PPP Loan Fraud Arrests will certainly produce an unwanted result one that includes the name of their company leading the headlines., IRS-CI Special Agent in Charge Jonathan D. Larsen said: In this difficult time when many Americans are struggling financially, it is repugnant that there are those who would fraudulently take advantage of relief efforts offered. So now, he says agencies must go after anyone who might be taking money theyre not entitled to. Nearly a dozen of those people took out two loans. Qui tam complaints are filed under seal However, the Trump administrations Justice Department also sought to assuage companies concerns, especially in regard to qui tam False Claims Act lawsuits. (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. In Louisiana, a federal grand jury recently indicted a Plaquemine woman named Lestreonia Rodrigue on fraud charges. The National Center for Disaster Fraud (NCDF) is in Baton Rouge and reports can be filed here. He said that lenders have been extremely cooperative during investigations and their suspicious activity reports have been very useful.. 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. According to the MITRE Corporation, a mismatched zip code or insufficient award description doesnt seem particularly egregious. Copyright 2021 WAFB. (WAFB) - The Paycheck Protection Program, known as PPP, provided a lifeline for millions of business owners when the pandemic was at its worst. Louisiana Department of Revenue Identity Theft Affidavit, Louisiana Workforce Commission Suspected Fraud Form. to fraudulently obtain the loan money. Government and federal taxpayers writ large arent the only victims of fraud in the pandemic lending programs. EVERY advertised under various aliases on Facebook to recruit individuals to obtain money from the PPP program. When the bank froze the funds, they froze as well, conducting Internet searches for topics related to PPP fraud. 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