ROUNDUP: The PPP Fraud Cases Keep Coming Under Trump SBA's Mismanagement
WASHINGTON, D.C. – Purchasing luxury sports cars and paying off mortgages was certainly not the intended use of taxpayer funds from the CARES Act’s Paycheck Protection Program (PPP) that was billed as a lifeline for struggling small businesses during the COVID-19 crisis. But local headlines of flagrant fraud and abuse of the program continue to pile up under the Trump administration’s poor design and management. [SEE BELOW ROUNDUP]
The reports come amid the FBI’s revelation this month that “hundreds of PPP fraud investigations have been opened, involving nearly 500 suspects and hundreds of millions of dollars of loans.” This followed a report from the Office of the Small Business Administration inspector general showing “Billions in COVID-19 relief loans may have been handed out to scammers.” Government watchdog Accountable.US — which has been tracking instances of blatant PPP fraud on its Bailout Fraud Map — pointed to the seemingly unabated exploitation of PPP as another reason Congress needs to start over with a new small business relief program that is transparent, accountable, and targeted to those who’ve been left behind, especially in communities of color.
“Trump’s Paycheck Protection Program was rife with abuse, misuse, and fraud from the start — so much so that even months after its expiration, we’re still getting regular reminders of the program’s failures,” said Kyle Herrig, president of Accountable.US.
“When Trump’s Senate allies are finally ready to get serious about passing new pandemic relief, more small business aid certainly must be part of that — but lawmakers must not make the same mistakes that allowed fraudsters to run amok while so many Black-owned businesses were shut out. The Trump administration cut corners on the Paycheck Protection Program’s design and implementation and then kept the public in the dark, so it’s no wonder fraudsters and cheats considered it an open invitation.”
FRESH START NEEDED FROM CONGRESS: An extensive report released by Accountable.US spotlighted the PPP’s shortcomings in providing financial support to the businesses and communities most gravely impacted by the pandemic. Instead of going to small businesses in need of payroll support for their workers, billions were snapped up by companies that double- and triple-dipped in relief funds, wealthy corporations and those with Trump administration connections, fraudsters, and more — all while hundreds of small businesses, particularly those in communities of color, were shut out of the program and left to fend for themselves. In the next small businesses relief package, Congress must put safeguards in place to ensure greater transparency, accountability, and prioritization of those most in need.
PPP FRAUD CASES IN THE NEWS:
- NBC 4 Los Angeles, 11/18: Brothers and Wives Charged in $5.6 Million COVID-19 Loan Scheme; The DOJ Indicted Four Individuals For “A Scheme To Submit At Least 35 Fraudulent Loan Applications Seeking Over $5.6 Million In” EIDL And PPP Loans That They Used To “Purchase Luxury Homes” That Were “Purchased For $1,000,000 And $3,250,000, Respectively.“ [Press Release, U.S. Department of Justice, 11/18/20]
- ABC 13, 11/18: Lamborghini and Porsche vehicles seized in $16M PPP fraud case in Houston
- Fox 2 Detroit, 11/13: Feds say metro Detroit pizza CEO committed fraud with Paycheck Protection Program
- Star Tribune, 11/11: Virginia man charged with fraudulently obtaining $2.5 million from government to buy airplane, luxury car
- CBS 11, 11/11, I-Team: Millions In PPP Money Went To Bogus Texas Companies With Little Vetting: “According to court records, Dinesh Sah of Coppell was approved for PPP funding for 11 different companies for a total of $17.7 million. Federal investigators said Sah used the money to pay off his home in Coppell and two in California owned by his wife. Sah also bought five additional houses in Coppell with PPP funds, according to investigators. Shortly after receiving the federal funds, court records show Sah bought a Bentley, a Porsche, a Corvette, and two Cadillacs.”
- San Fernando Valley Business Journal, 10/29: Two Men Charged With PPP Loan: “Two businessmen from the San Fernando Valley region were named in a federal criminal complaint Thursday for alleged participation in a nearly $2 million fraud involving PPP loans, according to the Justice Department.”
- Huffington Post, 10/27: Florida Man Accused Of Using $1.9 Million In PPP Loan Money On New Mercedes, Truck
- The News Tribune, 10/27: Washington man lied to get $1.1 million in COVID-19 relief funds, feds say
- The Texan, 10/14: North Texas Man Allegedly Stole $24 Million in PPP Funds, Sent Cash to India, Paid off Mortgages