In less than six months, more than 50 people have been charged with allegedly committing fraud in connection with the program. complaint (20-mag-12908). Lenders approved that amount for eight people, seven of whom got checks. The offices 44 investigators have been working at least three times the caseload that theyre usually used to working. The FBI, Secret Service, Homeland Security Investigations, and other offices of inspectors general are also part of the federal law enforcement effort. 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. 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. Sah, who pleaded guilty on March 24, used the funds to buy a Bentley convertible and multiple homes, among other things. 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). But in March 2021, the Small Business Administration Office of Inspector General issued a report that found that lenders last year issued more than one Paycheck Protection Program loan to 4,260 borrowers with the same tax identification number and borrowers with the same business name and address. Those loans were worth a total of $692 million. 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.. Qui tam complaints are filed under seal Louisiana Department of Revenue Identity Theft Affidavit, Louisiana Workforce Commission Suspected Fraud Form. 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. An internal analysis last fall by the Small Business Administration identified over 2 million approved PPP loan guarantees worth some $189 billion that were potentially not in compliance with the law, though it may turn out that many of those loans were not fraudulent. However, industry insiders say the barbershop industry is largely cash-based, making it easy to operate under the radar. PPP Fraud in Pride, Louisiana. Find out how you can get involved and stay up to date with our work. 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. He allegedly sought to obtain a total of more than $1.5 million in Paycheck Protection Program loans, at least $937,000 of which he successfully obtained. According to the MITRE Corporation, a mismatched zip code or insufficient award description doesnt seem particularly egregious. Origin Bank. Lawmaker wants police trained to handle Alzheimers, dementia patients, Health Minute: First at-home flu and COVID test authorized. Another large identity theft case led to charges against Jeremie Saintvil of Delray Beach, Florida in March. Saintvils attorney declined to comment. 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 Justice Department brought civil claims against the company under both the False Claims Act and Financial Institutions Reform, Recovery and Enforcement Act. As part of its own COVID-19 relief spending tracker 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. 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.. An estimated 1% of that 2009 stimulus was lost to fraud (some claim the rate is even lower than that). The line is staffed 24/7. Both laws have provisions allowing whistleblowers to receive a reward for successful recoveries obtained for the U.S. government. In addition to automated checks against existing government databases, lenders could have conducted online searches or called businesses neighboring a loan applicant to help establish whether the company seeking the loan is real or is the size it claims to be. 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. Using that public data, the 9 News Investigators took a close look at PPP loans given out in Louisiana. 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. 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. 650 Poydras Street, Suite 1600 It was this difficult road that we had about a week, but our bankers got it done and, and our businesswomen and businessmen stepped up to the plate and took advantage of it, said Sen. John Kennedy, R-La. 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. However, not everyone taking part in the federal program was looking to keep their business doors open. Louisiana has a total of 217,332 businesses that received Paycheck Protection Program (PPP) loans from the Small Business Administration. 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. 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.. In connection with these loan applications, the defendants falsely and grossly overstated the number of employees at the Victoria Companies and wages paid to those employees in order to obtain larger loans. 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. Complaints can also be filed online here. She's accused of making up fake businesses to collect more than $20,000 through. On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. 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. 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. The only way you can reverse those things is by understanding the metrics behind it and to have real goals around them.. (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. (WAFB) - The Paycheck Protection Program, known as PPP, provided a lifeline for millions of business owners when the pandemic was at its worst. Linda Miller, the deputy executive director of the Pandemic Response Accountability Committee, told Federal News Radio in September, 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. If it is just 5% of the combined $957 billion in Paycheck Protection Program loans and Economic Injury Disaster loans and advance grants, that would still be about $48 billion in fraud. If youre going to steal money, finite resources from people who need them, then, by God, were going to prosecute you.. The PPP loan forgiveness is not subject to Louisiana state income tax. With over 18 million Paycheck Protection Program loans and pandemic-related Economic Injury Disaster loans and advance grants approved over the last year, there is a sea of data on these programs. Share sensitive information only on official, secure websites. According to an indictment, Sah submitted at least 15 fraudulent applications on behalf of at least 10 companies. According to the allegations contained in the Complaint[1] unsealed today in Manhattan federal court: The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. Greenbergs insider was a loan officer who began working for the agency in May 2020. 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. BATON ROUGE, La. If convicted, EVERY faces a maximum penalty of twenty (20) years, followed by a term of supervised release for up to three (3) years, a fine up to $250,000.00, or twice the gross gain to the defendant, or twice the gross loss to any victim, and a $100.00 mandatory special assessment fee, per count. Yet if there is sufficient evidence, the government can still seize stolen money even in the absence of criminal charges. 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 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. Its the first public case of fraud in these pandemic loan programs attributed to corruption within the agencys own ranks. Nearly 11.5 million people filed applications, resulting in more than $792 billion worth of loans. In less than six months, more than 50 people have been charged with allegedly committing fraud in connection with the program. EVERY then charged approximately $3,500.00 once the loans were funded. 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. (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. To disguise the fraud, family members moved the proceeds through several bank accounts held in different names, according to the Justice Department. Investigators say those accused made false statements about things like how many people they employ, their average monthly revenue, and payroll figures. These are not simple or easy cases to investigate and charge, then-acting Assistant Attorney General Brian Rabbitt said at a press conference last September. BATON ROUGE, La. 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. According to todays indictment, EVERY created a fictitious business called Natural Hair Afro, LLC, Houma, LA 70360 and used this fictitious business name on nearly all of the fraudulent PPP loan applications. 66625. The involvement of a Small Business Administration employee in a pandemic loan fraud case raises questions about the agencys vetting of employees. In July, the agencys inspector general warned of potentially rampant fraud in the Economic Injury Disaster Loan program. 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