Baton Rouge Woman Pleads Guilty to Filing Numerous PPP and EIDL Loan Applications Totaling More than $1 Million and Laundering the Fraudulent Proceeds
Recently, Attorney General William P. Barr announced the results of the Paycheck Protection Plan (“PPP”) Criminal Fraud Enforcement Action, a new relief measure in the CARES Act designed to reduce pandemic-related fraud. As part of the CARES Act, the federal government made hundreds of billions of dollars in forgivable loans available to American businesses through the PPP. Specifically, PPP loans were made available to businesses so they would have funds to keep paying their employees, in order to avoid catastrophic job losses during a time of national emergency.
As of August 8, 2020, over 5.2 million loans had been approved, for a total federal business support expenditure in excess of $525 billion. At Attorney General Barr’s direction, the Criminal Division’s Fraud Section began to monitor the use of these public funds and, where appropriate, combat fraud in connection with the PPP program. In less than six months, more than 50 defendants have been charged with allegedly committing fraud to obtain money from the PPP. These charged cases involve attempts to steal over $175 million from the PPP, with the actual losses to the federal government of over $70 million.
These cases span the country and are diverse in size and scope, involving fraud ranging from loan requests for $30,000 to approximately $24 million. Investigations revealed false statements regarding number of employees, average monthly revenue and payroll figures, and applicants’ criminal histories. False documents were also submitted in support of applications to include falsified tax records, false payroll and revenue records, and in some cases, stolen personal information from unsuspecting third parties. Fraudulently-obtained federal funds were sometimes used to purchase luxury items such as homes, cars, vacations, and jewelry.
Federal agencies involved in this nationwide effort include the FBI, Internal Revenue Service–Office of Criminal Investigations, Small Business Administration’s Office of the Inspector General, and FDIC–Office of the Inspector General, as well as U.S. Attorney’s Offices. Financial institutions are critical partners to federal authorities by detecting and investigating potentially fraudulent activity and freezing funds and accounts. Investigations into PPP fraud continue to be ongoing around the country.
“The PPP was developed to ease the pain of COVID-19 economic restraints on working Americans. 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. 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.”
The National Center for Disaster Fraud (NCDF), a national coordinating agency within the Criminal Division of the U.S. Department of Justice, operates a call center at Louisiana State University in Baton Rouge, Louisiana, and serves as a centralized clearinghouse for disaster fraud complaints and information relating to both natural and man-made disasters, and other emergencies such as COVID-19. Members of the public who suspect fraud, involving the Payroll Protection Program, or believe they have been the victim of fraud from a person or organization soliciting funds on behalf of disaster victims, should contact the NCDF Hotline toll free at (866) 720-5721. The telephone line is staffed by a live operator 24 hours a day, seven days a week. You can also file a complaint via our online complaint portal at www.justice.gov/disastercomplaintform.