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. The DOJ says this ill-gotten money was in many cases used to buy luxury personal items like cars, homes, vacation trips, and jewelry. And I, I think we ought to prosecute every single one of them to the full extent of the law, said Kennedy. This table shows the top 5 industries in Louisiana by number of loans awarded, with average loan amounts and number of jobs reported. Making sure that victims of federal crimes are treated with compassion, fairness and respect. But even with an allegedly corrupt insider, a loan system with adequate checks should have prevented Greenbergs loans from being approved. But because the Department of Justice has made PPP and EIDL a priority we are seeing results from DOJ rather quickly in a lot of our investigations., Others in government have also remarked on how fast many of these cases The CARES Act precluded the agency from exercising one important check on fraud in the Economic Injury Disaster Loan program. Barbershops were one of the most common businesses to apply. 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. The Department of Justice confirms they are looking into reports of PPP fraud across the nation. 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. 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. PPP Loan Recipient List By State . Both the U.S. Attorneys Office and the Louisiana Attorney General have encouraged the community to report suspected fraud. Louisiana. Has the curve flatten in my town? And this is not the only case. The scale of lending means the potential amount of Economic Injury Disaster loan fraud is staggering. 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. Click on a company's name to see additional loan details. 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. Dr. James Hobley: When should you be screened for colon cancer? Louisiana has a total of 217,332 businesses that received Paycheck Protection Program (PPP) loans from the Small Business Administration. ) or https:// means youve safely connected to the .gov website. According to the Justice Department, Didier Kindambu obtained two loans by creating fraudulent payroll documentation for each business.. 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 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. Summary of PPP Loans in Louisiana. EVERY charged $45.00 to $120.00 from the individuals she recruited to prepare and submit the fraudulent PPP application. 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. 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. Gibsland Bank & Trust Company. In fraud cases where there is no apparent misuse of a loan, civil enforcement may be more likely than criminal prosecution. We dont have the capacity to work everything that comes in, Grossman told POGO. 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. The Department of Justice says in Feb. 2021, Gray created a scheme to defraud a lender and the United States, through the Small Business Administration, by filing false applications for PPP. That situation may arise in cases of apparent fraud involving Economic Injury Disaster loan advance grants of $10,000 or less. A total of 73,824 loans were distributed to Louisiana leading to a reported 799,664 jobs being retained. However, the Trump administrations Justice Department also sought to assuage companies concerns, especially in regard to qui tam False Claims Act lawsuits. are moving. The program began issuing loans again in January 2021, and some businesses are eligible for a second loan. For more information on the Departments response to the pandemic, please visit https://www.justice.gov/coronavirus. Allegedly, the family sought, ultimately unsuccessfully, to use the funds to purchase a $3.7 million mansion in Disney Worlds Golden Oak gated community. During the programs first round, the Small Business Administration issued 5.2 million loans between April and August 2020. We will also begin processing paper returns downloaded from the LDR website at, The federal Coronavirus Aid, Relief and Economic Security (CARES) Act provided Economic Impact Payments of $1,200 for qualifying individuals and $2,400 for qualifying married couples, with an additional $500 per dependent child. 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. Your Address, Corporation Income/Franchise Extension Request. According to the U.S. Attorneys Office, there have been dozens of people charged with fraud nationwide and there are five pending Federal civil procedures where agencies are looking to get back $2.3 million worth of fraudulent assets including two high-end cars, a house, and cash. GOODWILL INDUSTRIES OF NORTH LOUISIANA INC. Click here to report information on Amazon warehouses. Horowitz, the Justice Departments inspector general, recently testified to a House panel examining COVID-19 loan fraud that a legislative reform could help address the problem of fraud in smaller dollar amounts. 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. . Kindambu applied for two Paycheck Protection Program loans representing Papillon Holdings, Inc. and Papillon Air, Inc., according to court documents. AGs Office announces more than 50 arrests connected to Paycheck Protection Program fraud. A .gov website belongs to an official government organization in the United States. The PPP loan forgiveness is not subject to Louisiana state income tax. 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.. 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 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. The forgivable loans were meant to cover payroll for employees and, later, other eligible expenses at a time when customers werent coming in. 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. 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. 5 min read. According to the House Select Subcommittee on the Coronavirus Crisis, the SBA Office of Inspector General has received nearly 750,000 referrals of suspected identity theft related to the program over the last year. On applications for loans for two companies, Greenberg Media Group and DG3 Network, Greenberg allegedly lied about not being under indictment despite having been arrested by federal agents and charged just days earlierwith the indictment a matter of public record. 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. To support his loan applications, Kindambu claimed that Papillon Holdings had $150,000 in monthly payroll expenses and that Papillon Air had over $850,000 in monthly payroll expenses. 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. 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. PPP loan information is available to the public through the SBA, and several groups have even published that information in the form of online searchable databases that anyone can use. 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. Congress reversed course when it passed a new law on December 27, which authorized more coronavirus loans. 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. POGO was unable to reach Edwards before publication. In email and text exchanges, defendants acknowledged that a number of the companies did no legitimate business, disqualifying them from receiving the loans. 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. Created under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the Paycheck Protection Program has lent out $755 billion to businesses as of April 11. The charges contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty. 2020 Louisiana Individual Income Tax returns and payments are due Monday, May 17, 2021. Acting U.S. Attorney Audrey Strauss said: As alleged, these defendants conspired to rip off the SBAs COVID-relief small business loan program and financial institutions by lying about how many people they employed in their family business and how much they paid those employees. 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. In Louisiana, a federal grand jury recently indicted a Plaquemine woman named Lestreonia Rodrigue on fraud charges. Both laws have provisions allowing whistleblowers to receive a reward for successful recoveries obtained for the U.S. government. Does something look fishy to you? In order to support the false representations in the loan applications about the number of employees at, and the wages paid by, the Victoria Companies, the defendants submitted fraudulent and doctored payroll and tax records. 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. In connection with loan applications for COVID-19 relief available from the Paycheck Protection Program (PPP) of the SBA, the defendants falsely and grossly overstated the number of employees and payroll at their nail salons and other businesses through fraudulent and doctored payroll and tax records in order to obtain larger loans. portville central school yearbooks; jennette mccurdy astroseek. The Small Business Administration distributed 5.8 million advance grants worth $20 billion last year (despite the name, these are not loans that have to be repaid). My feeling is that despite the fraud, the program helped far, far, far more of my people than it hurt, said Kennedy. 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.. One source of relief provided by the CARES Act was the authorization of hundreds of billions of dollars in forgivable loans to small businesses for job retention and certain other expenses through the SBAs PPP. When they believe they have unearthed sufficient evidence to allege the government has been defrauded, these individuals file qui tam lawsuits, Grossman said. The scandal is whats legal, not whats illegal.. Grossman said his office has shared data with the Department of Health and Human Services Office of Inspector General, which identified some repeat offenders. Check out bed occupancy rate of hospitals. The loans have to be repaid with low interest. After the defendants learned that a hold was placed on bank accounts of the Victoria Companies that received PPP loans issued by one financial institution due to suspicion of fraudulent activity, one of the defendants conducted Internet searches for PPP Fraud, PPP Loan Fraud Arrests, and How to get rid of a PPP Loan. The defendants thereafter withdrew the applications for and/or repaid the PPP loans for the Victoria Companies issued by that financial institution. The PPP loan was created through the March 2020 CARES Act as a lifeline for businesses struggling through the coronavirus pandemic. The lender got to keep a fee based on the size of the loan. (WAFB) - The Paycheck Protection Program, known as PPP, provided a lifeline for millions of business owners when the pandemic was at its worst. 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. The three Economic Injury Disaster loans Greenberg obtained should have triggered red flags galore. 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. | Click here for information on the investigation into the Mount Vernon Police Department. For much of 2020, the agency also issued grants of up to $10,000 under the program that do not have to be repaid by eligible recipients. The case led to criminal charges, including aggravated identify theft, filed in Texas in February. Data analysts at the inspector generals office have been combing through Paycheck Protection Program and Economic Injury Disaster loan data to look for markers of potential fraud, such as repeat loan applicants from the same physical addresses, Grossman told POGO. According to a court filing signed by a Secret Service agent, a family of four was behind a scheme 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. EVERY advertised under various aliases on Facebook to recruit individuals to obtain money from the PPP program. 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. 66625. (Eligible companies and nonprofit organizations can apply for and receive both Paycheck Protection Program and Economic Injury Disaster loans.). POGO has sought additional data from the Small Business Administration, and to improve data collection. The Paycheck Protection Program saved millions of jobs. 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