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. Its the first public case of fraud in these pandemic loan programs attributed to corruption within the agencys own ranks. 2020 Louisiana Individual Income Tax returns and payments are due Monday, May 17, 2021. When they believe they have unearthed sufficient evidence to allege the government has been defrauded, these individuals file qui tam lawsuits, Grossman said. 66625. According to the SBA, lenders are responsible for vetting applications and making sure the applicant is telling the truth in whatever way they see fit. He said that lenders have been extremely cooperative during investigations and their suspicious activity reports have been very useful.. One percent of the recovery acts $501 billion in spending would be about $5 billion. Thats because, at least in part, its optional for loan applicants to supply that information. 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. Facebook; Linkedin; louisiana ppp loan arrestsaboriginal handmade jewellery 19 January 2023 / in types of poop poster spencer's / by / in types of poop poster spencer's / by Another large identity theft case led to charges against Jeremie Saintvil of Delray Beach, Florida in March. That new law permitted SBA to require additional information from applicants, such as tax returns, for loans and advances as part of its verification, according to Shear of the Government Accountability Office. They often involve obtaining and then piecing together often-complex financial, payroll, and tax records for individuals and companies, and sifting through other evidence. Rabbitt noted the unparalleled speed with which these cases have been investigated and prosecuted.. (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. On January 11, in the final days of the Trump administration, the Small Business Administration began processing a new round of Paycheck Protection Program loans. The charges contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty. At the request of WAFB, the Louisiana Board of Barber Examiners also searched their apprentice, student, barber, and shop records for those eight names and addresses, and came up empty as well. The PPP loan forgiveness is not subject to Louisiana state income tax. (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. woman indicted for preparing 110 fraudulent PPP loans. 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. Those who suspect PPP fraud or may have been a victim of such fraud should contact the National Center for Disaster Fraud (NCDF) hotline at 866-720-5721. 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. 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. The Justice Department said law enforcement arrested defendants in Miami on Wednesday and Thursday who officials allege are involved in a "criminal ring" that attempted to steal $24 million in. A check of Floridas Division of Corporations database would have revealed the companies had just been reinstated. 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. Official websites use .gov 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. You have to understand from the lenders perspective, really, theyre just looking at income. The DOJ says this ill-gotten money was in many cases used to buy luxury personal items like cars, homes, vacation trips, and jewelry. EVERY created all of the false and fraudulent invoices, bank statements, and Schedule Cs. 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. The scale of lending means the potential amount of Economic Injury Disaster loan fraud is staggering. *** For media inquiries, contact: 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. In July, the agencys inspector general warned of potentially rampant fraud in the Economic Injury Disaster Loan program. The Department of Justice confirms they are looking into reports of PPP fraud across the nation. EVERY received these funds into her Current account, her Cash App account, or into her boyfriends Current account. Report it to the Small Business Administrations with just a few clicks. 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. Meant to help small businesses keep workers on the payroll, the Paycheck Protection Program offers loans of up to $10 million that can be forgiven in full if recipients meet certain employee retention requirements. In December 2020, an independent auditor informed the SBA that, out of 5.2 million Paycheck Protection Program loans in 2020, the agency made over 2 million approved PPP loan guarantees worth some $189 billion potentially not in compliance with the law. SOUTHERN MAGNOLIA LANDSCAPING LLC. 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. 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. This case was brought in New Orleans, Louisiana. 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. The PPP was developed to ease the pain of COVID-19 economic restraints on working Americans. 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). 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. Louisiana Department of Revenue Identity Theft Affidavit, Louisiana Workforce Commission Suspected Fraud Form. Identity theft is probably the most common underlying cause of the fraud that were finding, particularly in the EIDL program, SBA Inspector General Hannibal Mike Ware said in testimony before Congress in late March. In remarks before the U.S. Chamber of Commerce, an influential business lobbying group, last June before the SBA released partial data identifying Paycheck Protection Program recipients of loans above $150,000, then-Principal Deputy Assistant Attorney General Ethan P. Davis said that with the administrations decision to release that information, some have predicted more qui tams as a result., Davis then said, Let me be clear. You know, is it something that they should have done? If youre going to steal money, finite resources from people who need them, then, by God, were going to prosecute you.. The auditor found that the deficiencies were caused by an inadequate entity wide control environment.. BATON ROUGE, La. The PPP loans are forgivable under certain conditions and the loan forgiveness is not taxable income for federal tax purposes. The addresses listed for the two companies, according to SBA loan data, also do not match the addresses in the states corporation recordsyet another sign of potential fraud. The only way you can reverse those things is by understanding the metrics behind it and to have real goals around them.. The defendants were arrested this morning. All rights reserved. Share sensitive information only on official, secure websites. Nick Schwellenbach Ryan Summers is a research fellow for POGO. (Eligible companies and nonprofit organizations can apply for and receive both Paycheck Protection Program and Economic Injury Disaster loans.). In fraud cases where there is no apparent misuse of a loan, civil enforcement may be more likely than criminal prosecution. Qui tam complaints are filed under seal & Both laws have provisions allowing whistleblowers to receive a reward for successful recoveries obtained for the U.S. government. That story of corruption inside SBA has been overshadowed by other criminal allegations against Greenberg, notably child sex trafficking charges, and a scandal that might bring down a member of Congress. 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. The CARES Act precluded the agency from exercising one important check on fraud in the Economic Injury Disaster Loan program. The scandal is whats legal, not whats illegal.. 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. Louisiana Workforce Commission Suspected Fraud Form. The line is staffed 24/7. 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. 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. They. how to get to quezon avenue mrt station Uncovering hot babes since 1919. 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. For media inquiries, contact: 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. The lender got to keep a fee based on the size of the loan. 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. This map is your interactive guide to confirmed cases, recoveries and deaths from the coronavirus around the state, nation and world. 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. Firm estimates of fraud related to CARES Act spending, including the Paycheck Protection Program and the Economic Injury Disaster Loan program, may not be available until many more cases are brought and more analysis has been conductedpotentially years away. 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. of Loans Jobs Retained 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. 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. They allegedly exploited a program designed to provide vital funding for small businesses that are legitimately struggling in the midst of the pandemic. BATON ROUGE, La. Maybe, maybe not all.. 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. 6 AVG COMPANY SIZE. In a nod to changes that have improved oversight, William Shear, the Government Accountability Offices director of financial markets and community investment, testified on March 25 that, Although SBA has taken some steps to mitigate fraud risks to PPP and EIDL, such as conducting PPP loan reviews and implementing new EIDL controls, the agency has not yet conducted a formal fraud risk assessment for either program. The Small Business Administration last month agreed to conduct such a risk assessment. Congress reversed course when it passed a new law on December 27, which authorized more coronavirus loans. As part of its own COVID-19 relief spending tracker More due diligence on the part of lenders or the Small Business Administration could have prevented at least some instances of fraud, especially when applicants appear to have inflated or fabricated payroll expenses or used defunct or bogus companies to illicitly obtain loans. Both the outgoing Trump administration and the Biden administration appear to have learned lessons from the fraud that occurred in 2020. Dr. James Hobley: When should you be screened for colon cancer? Those who suspect PPP fraud or may have been a victim of such fraud should contact the National Center for Disaster Fraud (NCDF) hotline at 866-720-5721. Banks and other lenders have been filing a huge number of suspicious activity reports to the Treasury Departments Financial Crimes Enforcement Network (better known as FinCEN) related to the Paycheck Protection Program and the Economic Injury Disaster Loan program. Suspicious activity reports for small business loan fraud continued at levels far higher than normal through the end of 2020, according to POGOs review of federal data. Kindambu applied for two Paycheck Protection Program loans representing Papillon Holdings, Inc. and Papillon Air, Inc., according to court documents. According to the National Priorities Project, thats enough money to pay for both coronavirus vaccine doses for every American and 1.1 million full-time jobs at $15 an hour for an entire year. The release states that, In exchange for a fee, My Buddy Loans took personal identifying information from victims and promised to file an application for an agricultural grant, which they said was available to those who owned a few acres of land. Instead, the defendants Clifton Pape, 45, and Sally Jung, 58, both of Cleveland, Texas, actually filed fraudulent EIDL applications with the SBA that contained the victims personal identification information.. The PPP loan was created through the March 2020 CARES Act as a lifeline for businesses struggling through the coronavirus pandemic. Inaccuracies in the data or missing data can undermine oversight. On March 30, the Justice Department unveiled new charges against Joel Greenberg, a former Florida tax collector. 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. Civil enforcementwhere the evidentiary burden is lower than in criminal casesis another way of holding individuals and companies accountable. (212) 637-2600, Human Trafficking & Child Sexual Exploitation, Department of Justice Harassment Prevention Resource, Download Ngoc Manh Nguyen et al. Has the curve flatten in my town? 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. 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. Loan Range No. 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. Secure .gov websites use HTTPS According to the Justice Department, Didier Kindambu obtained two loans by creating fraudulent payroll documentation for each business.. [1] As the introductory phrase signifies, the entirety of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation. Thats more than 10 times the fraud recoveries five years after the 2009 stimulus became law. The forgivable loans were meant to cover payroll for employees and, later, other eligible expenses at a time when customers werent coming in. For instance, in one larger case, the Justice Department has charged 19 individuals to date. The Paycheck Protection Program (PPP) established by the CARES Act, provides small businesses with funding for payroll costs, mortgage interest, rent, and utilities. A picture from that stay shows Pape and Jung celebrating over sparkling wine. Jungs attorney declined to comment, and Papes attorney did not respond to a request for comment. A vast number of referrals to the Small Business Administrations (SBA) Office of Inspector General involve complaints of identity theft, particularly related to the Economic Injury Disaster Loan (EIDL) program. Under the False Claims Act (FCA) as well as the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA), either the government or whistleblowers with non-public information can initiate civil enforcement actions. Copyright 2020 WAFB. Investigators determined there were at least 110 PPP sole proprietor loan applications in and around the Thibodeaux, Louisiana area and they all had the same invoices and federal tax forms (Schedule C) with the same business name and amounts. General warned of potentially rampant fraud in these pandemic loan programs attributed to corruption within the agencys ranks... Database would have revealed the companies had just been reinstated unless and until proven guilty criminal., the Justice Department unveiled new charges against Joel Greenberg, a former Florida tax collector appear to real. Based on the size of the false and fraudulent invoices, bank,... The PPP loan forgiveness is not taxable income for federal tax purposes environment.. 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