These comma-delimited files can be opened in Microsoft Excel or any other data management software. The charges pending in these cases include bank fraud, mail fraud, wire fraud, money laundering, and making false statements to financial institutions, among others. Seven Charged in Fraud Ring (South Carolina - September 10) . The Economic Injury Disaster Loan program is longstanding, and until recently the Small Business Administration limited these loans to $150,000 (last month it raised the cap to $500,000). 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. Arnold & Porter Kaye Scholer LLP 2023 All Rights Reserved. According to the DOJ, the former candidate submitted a fraudulent loan application, including fictitious tax records, on behalf of a nonprofit in which she claimed the organization was paying 54 employees. Jonathan E. Green Some of these qui tam lawsuits are traditional whistleblower cases, but others involve individuals who are slicing and dicing the data that has been made available about loans, according to Grossman. Arnold & Porter represents borrowers, lenders, and other service providers in all manner of issues arising under the PPP and other CARES Act programs. Washington, D.C. 20016-8017, Data project moves to Center for Public Integrity, 1 billion records and counting: The Accountability Project reaches new milestone, Site showcases powerful stories and the reporters behind them. Red Flags: The First Year of COVID-19 Loan Fraud Cases - POGO Associate According to Grossman, the Small Business Administration watchdog official, all of our ongoing investigations involve individual borrowers rather than lenders. Where does plastic go? 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. General Litigation. Majority of Paycheck Protection Program loans have been forgiven, SBA project, POGO has been examining equitable access to government loans, grants, and contracts. The data shown has been made available to the public by the SBA. Many Paycheck Protection Program loans appear to have been issued to recipients who were not eligible under the programs rules. Which Federal Agencies Investigate PPP Loan Fraud? & These investigations have varied widely in both their scope and the specific allegations targeted. If you were to default, the lender would have the right to recover what is owed through the sale of the collateral, which could include your primary residence, business assets, or even your car. 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. More than a year after the pandemic brought much of the economy to a standstill, mounting fraud cases underscore how the Small Business Administrations (SBA) oversight of its massive taxpayer-backed lending programs proved to be inadequate as they became magnets for fraudsters. PPP Loans List :: PPP Detective It's important to note that SBA loans are secured loans that require you to list collateral in the loan agreement. Ryan Summers is a research fellow for POGO. It was literally the lifeline that kept thousands of businesses afloat, said Gordon Denlinger, state director for the National Federation of Independent Businesses in Pennsylvania. He has defended clients in PPP Loan Fraud cases and COVID-19 investigations. Paycheck Protection Program | U.S. Department of the Treasury Both the outgoing Trump administration and the Biden administration appear to have learned lessons from the fraud that occurred in 2020. After months of litigation, the SBA released the dataset Tuesday night on every small business that received a Paycheck Protection Program (PPP) or Economic Injury Disaster (EIDL) loan. The PPP / Cares Act that was put in place to help business affected by Covid-19. In order to avoid repaying their loans, PPP recipients must certify to compliance with the terms of the program. The scandal is whats legal, not whats illegal.. Two years after going live, TAP hits a major milestone. Some investigations begin with complaints received through the watchdogs hotline, and others come from referrals by federal agencies or state and local law enforcement. Even if the Justice Department declines to join a case, the whistleblower and their private counsel can continue to pursue it. That watchdog office has recommended that the agency use data analysis as a means to detect potentially ineligible and fraudulent applications.. PDF Paycheck Protection Program Loan Recipients on the Department of Law enforcement insiders say many more pandemic loan fraud cases will be brought in the months and years ahead. 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. 23-Year-Old Charged with Submitting Fraudulent PPP Loan Applications In February 2021, the DOJ filed charges against a 23-year-old New York resident who is accused of submitting multiple fraudulent PPP loan applications on behalf of a single company. Whistleblowers Said This Company Is a Fake Small Business. The SBA now also conducts manual loan reviews for the largest loans in the PPP portfolio and a random sampling of other loans. Underscoring the tension between fraud prevention and disbursing assistance quickly, the added checks to verify information submitted by applicants have somewhat slowed the processing of loan applications. On June 28, 2020, the day loan applications were filed for the two companies, Greenberg reinstated the companies with Floridas state government since they had been administratively dissolved years prior to the February 2020 eligibility cutoff. The Act originally authorized up to $349 billion in forgivable loans to small businesses through the Paycheck Protection Program (PPP), and Congress later authorized $321 billion in additional PPP funding. No guarantees are made as to the accuracy of the data. The SBA Employee would and did use her access to the SBAs computer systems and her access to EIDLs to manipulate the status of EIDLs to trigger the system to extend funding for EIDLs submitted for the benefit for Joel Micah Greenberg, the indictment alleges. He added though that hes not optimistic that grants directed to help restaurants will be included in the next round of federal stimulus so getting more PPP loans would be the best alternative. 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. When Cops Are Fired: How one attorney forces police chiefs to rehire dismissed officers. Acknowledging PPP loan applicants' compliance burdens (and the limited information that was initially made available to applicants), the U.S. Small Business Administration ( SBA) offered a grace period within which companies could return improperly obtained PPP loans without penalty. Additionally, the CARES Act has authorized other relief, such as the Economic Injury Disaster Loan (EIDL), Economic Impact Payments (EIP), Provider Relief Fund (PRF), Pandemic Unemployment Assistance (PUA), and Federal Pandemic Unemployment Compensation (FPUC). An unknown additional number of loans went to companies. Submitting a fraudulent PPP loan forgiveness certification can lead to prosecution even for recipients that validly obtained their PPP loans. 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. However, the DOJ alleges that the nonprofit in fact had not paid any wages in the prior year, and it further alleges that the former candidate used the PPP funds to pay for a swimming pool and cover other personal expenses. 46. The number of potentially questionable loans approved through these programs is vast, as will be the task of determining how many of those loans were fraudulent or otherwise improper. 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. The Justice Department brought civil claims against the company under both the False Claims Act and Financial Institutions Reform, Recovery and Enforcement Act. All data in this search comes directly from the publicly available EIDL data on the SBA website. 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.. California has a total of 1,270,615 businesses that received Paycheck Protection Program (PPP) loans from the Small Business Administration. So You're Green Prove It or Be Prosecuted: ACCC Sweep Finds 57 California Court of Appeal Addresses When Violations are Willful or Whats new in Belgium on the employment front? 9 AVG COMPANY SIZE. Paycheck Protection Program Loan Recipients on the Department of Treasury's Do Not Pay List, January 11, 2021. . This disclosure covers each of the 4.9 million PPP loans that have been made. 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. The Coronavirus Aid, Relief, and Economic Security ("CARES") Act is a federal law passed in March 2020 that provided $2.2 trillion dollars in emergency financial assistance to the millions of Americans who are suffering the economic effects caused by COVID-19. U.S. Small Business Administration 409 3rd St, SW. Washington DC 20416 Free Speech Shines Bright, Illuminates Patent Owners Right to Allege California Supreme Court to Address Rounding of Employee Time. Associate 107 of the cases, accused individuals allegedly falsified payroll documentation to justify either getting a loan or getting a bigger loan than they were eligible for; 93 of the cases, accused individuals allegedly created fake tax documents used for verifying details in loan applications; 41 of the cases, accused individuals allegedly created bogus companies to get loans; 28 of the cases, accused individuals allegedly used defunct companies to get loans; 20 of the cases, accused individuals used stolen identities or aliases while applying for loans; 12 of the cases, accused individuals allegedly falsified ownership of existing legitimate businesses; 28 of the cases, accused individuals also obtained Economic Injury Disaster loans (some of these individuals have been accused of fraudulently obtaining these loans. Congress also authorized the Small Business Administrations existing Economic Injury Disaster Loan (EIDL) program to lend in response to the pandemic, and nearly $202 billion in loans through that program have been approved as of April 1.