According to Grossman, the Small Business Administration watchdog official, all of our ongoing investigations involve individual borrowers rather than lenders. Some investigations begin with complaints received through the watchdogs hotline, and others come from referrals by federal agencies or state and local law enforcement. The SBA has very broad rules, very, very large leeway on what the lender had to request from the bar to get that guarantee secure, said the SBA Louisiana District Director Michael Ricks. 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. The lender got to keep a fee based on the size of the loan. All totaled, in that city of 43,000 people lenders approved $1.3 million dollars just for barbershop owners. 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. 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. The case led to criminal charges, including aggravated identify theft, filed in Texas in February. 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. 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. 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. He also opened bank accounts and lines of credit at financial institutions and credit card companies in the names of his elderly victims, according to the Justice Department. Sen. John Kennedy says in the rush to get help to people in need as quickly as possible, Congress didnt have time to build many safeguards against fraud into the program. Thats because, at least in part, its optional for loan applicants to supply that information. The False Claims Act will play a central role in the Departments pursuit of COVID-19 related fraud, Michael Granston, a Justice Department deputy assistant attorney general, said in December. Origin Bank. Mr. Aqeel asserts his presumption of innocence and demands the United States prove their allegations beyond a reasonable doubt. Mingledorff also said, The case is in the pretrial phase of litigation. AGs Office announces more than 50 arrests connected to Paycheck Protection Program fraud. Audrey Strauss, the Acting United States Attorney for the Southern District of New York, Amaleka McCall-Brathwaite, Eastern Region Special Agent-in-Charge of the Office of the Inspector General of the U.S. Small Business Administration (SBA-OIG), William F. Sweeney Jr., Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (FBI), and Jonathan D. Larsen, Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (IRS-CI), announced today the arrests of NGOC MANH NGUYEN, a/k/a Peter Nguyen, VICTORIA DIEUY HO, a/k/a Vicky Ho, and DAT TAT HO for a fraudulent scheme to obtain over $13 million in Government-guaranteed loans designed to provide relief to small businesses during the novel coronavirus/COVID-19 pandemic. POGO has sought additional data from the Small Business Administration, and to improve data collection. For instance, in one larger case, the Justice Department has charged 19 individuals to date. The PPP loans are forgivable under certain conditions and the loan forgiveness is not taxable income for federal tax purposes. 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.. Your Address, Corporation Income/Franchise Extension Request. For more information on the Departments response to the pandemic, please visit https://www.justice.gov/coronavirus. April 15, 2021. Eastern District of Louisiana One case involved applications for hundreds of allegedly fraudulent Economic Injury Disaster loans and at least a $1.3 million loss to the federal government. 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. 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. And these cases are just the beginning. Click on a company's name to see additional loan details. Using that public data, the 9 News Investigators took a close look at PPP loans given out in Louisiana. 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. Brian Grossman, the Small Business Administrations assistant inspector general for investigations, told POGO that as of March 10, 2021, the watchdog office had 91 active Paycheck Protection Program investigations and 121 active Economic Injury Disaster loan investigations. EVERY prepared and submitted false and fraudulent PPP sole proprietor loan applications via various online portals including, but not limited, to Blueacorn. What happens when the watchdog tasked with overseeing the most powerful law enforcement agency in the country doesnt do its job? The PPP was developed to ease the pain of COVID-19 economic restraints on working Americans. mike vernon royal household; are there snakes in gran canaria; shooting in laurel, md yesterday. complaint (20-mag-12908). ) or https:// means youve safely connected to the .gov website. According to court records, Amir Aqeel and several others in the Houston area allegedly created fake tax and payroll documentation in exchange for large kickbacks for referring others into the scheme that involved 12 corporate entities. And these cases are just the beginning. (In late March, the Justice Department told Congress that it had charged $446.8 million in losses related to PPP. Some of these cases may still be under seal and charges are routinely being unsealed.) The program worked like this. According to the Board of Barber Examiners, to legally run a barbershop, an owner must have a business license and a barber license if they are cutting hair even if that business is run out of a home. However, industry insiders say the barbershop industry is largely cash-based, making it easy to operate under the radar. 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. 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. edgewater hotel haunted; can uk consultant doctors work in usa; is spitfire a compliment A borrower applied for a PPP loan from a lender or bank. 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. For media inquiries, contact: Nearly a dozen of those people took out two loans. An indictment includes text and email messages involving creating tax records for some of the companies. While not all of these new reports can be attributed to the government relief effort, they are a sizeable share of the increase., Similarly, a February report by the Pandemic Response Accountability Committee stated that Identity theft is on the rise and has been exploited by bad actors to obtain pandemic response funds, such as unemployment insurance benefits, PPP loans, and EIDLs., Grossman told POGO, There are also PPP and EIDL cases were aware of that are being investigated by state and local authorities, because my agents out in the field get calls from state police and local police departments, where they have received complaints from citizens on identity theft, for example.. & Complaints can also be filed online here. Director for the Louisiana SBA District Office Michael Ricks said while that information may raise some red flags on the surface, he explained that not complying with an industrys licensing requirements does not necessarily disqualify someone from being eligible for a PPP loan. We hear reports of arrests and arraignments for PPP loan cases involving only $10,000 or $15,000. According to a court filing signed by a Secret Service agent, a family of four was behind a scheme Former La. Data analysis could also help the agency assess potential policy changes, and the Biden administration made some changes to make access to relief more equitable earlier this year. Use our searchable database to see who in Louisiana received funds. Louisiana has a total of 217,332 businesses that received Paycheck Protection Program (PPP) loans from the Small Business Administration. This March, the Government Accountability Office revealed that 4 months after SBA started using a system to approve Economic Injury Disaster loans in batches, agency officials realized this system contained alerts that should have been reviewed by loan officers, but had not been. The Federal Trade Commission wrote in February that, Last year, we received 99,650 reports of fraud involving business or personal loans, compared with 43,920 reports in 2019, before the pandemic began. SBA has fired employees and contractors who were involved in approving loans to themselves or who inappropriately influenced loan approval. 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. 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. However, both Kennedy and Ricks say the good the program did far outweigh any possible fraud. The Paycheck Protection Program (PPP) established by the CARES Act, provides small businesses with funding for payroll costs, mortgage interest, rent, and utilities. In another case, a Virginia resident obtained over $2.5 million from the Paycheck Protection Program and used the funds to buy not only a luxury car but a private plane. So were trying to reverse that. Gibsland Bank & Trust Company. (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. Congress reversed course when it passed a new law on December 27, which authorized more coronavirus loans. Aqeel used some of the proceeds to purchase a Lamborghini sports car, according to the Justice Department. Ms. Strauss also thanked Homeland Security Investigations and the U.S. Attorneys Office for the Eastern District of New York for their assistance with the investigation. 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. Louisiana has a total of 217,332 businesses that received Paycheck Protection Program (PPP) loans from the Small Business Administration. . Law enforcement insiders say many more pandemic loan fraud cases will be brought in the months and years ahead. Click here for information on the investigation into the Mount Vernon Police Department. 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 He said that lenders have been extremely cooperative during investigations and their suspicious activity reports have been very useful.. VICTORIA HO will be presented tomorrow in Manhattan federal court before U.S. Magistrate Judge Sarah Netburn. If the borrower can prove they used the money to pay employees and eligible expenses, they can ask the SBA for loan forgiveness. They. EVERY then charged approximately $3,500.00 once the loans were funded. PPP Loan Recipient List By State . As former federal prosecutor Tarek Helou told the Wall Street Journal, The scandal is whats legal, not whats illegal., Lenders may also be more likely to face civil enforcement than criminal enforcement. Thats more than 10 times the fraud recoveries five years after the 2009 stimulus became law. An attorney for Aqeel, Tommy T. Mingledorff, told POGO by email that these allegations are denied. Inaccuracies in the data or missing data can undermine oversight. According to an indictment, Sah submitted at least 15 fraudulent applications on behalf of at least 10 companies. About one year after the passage of the CARES Act, $626 million in funds have already been seized or forfeited related to criminal and civil investigations of pandemic loan fraud. The PPP loan forgiveness, Fairs, Festivals, and Other Special Events, The Importance of Protecting Client Tax Information, 2022 Practitioner Tax Update Seminar Schedule, Update The Small Business Administration has sent 1.34 million referrals related to Economic Injury Disaster loans to its office of inspector general, which is tackling these and Paycheck Protection Program fraud cases in coordination with a host of other law enforcement agencies. (The latest round, which began in January, allowed some applicants to receive a second Paycheck Protection Program loan. One case involves Dinesh Sah, a Dallas-area man, who obtained $17.3 million after having sought a $24.8 million loan. To disguise the fraud, family members moved the proceeds through several bank accounts held in different names, according to the Justice Department. Please click here for further information. (212) 637-2600, Human Trafficking & Child Sexual Exploitation, Department of Justice Harassment Prevention Resource, Download Ngoc Manh Nguyen et al. And this is not the only case. 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. Applicants fraudulently obtained at least $16 million, per the Justice Department. Given the focus of the PPP to support employees during the COVID-19 pandemic, the Robinson Bradshaw firm wrote last May, it is easy to imagine how a dissatisfied employee observing imperfect business conduct in securing a PPP loan or applying loan proceeds could use that insider information to bring a qui tam action under the FCA.. But in the year since the CARES Act became law, it has received nearly 150,000 hotline complaints, representing a 19,500% increase over prior years, according to a staff memo from the House Select Subcommittee on the Coronavirus Crisis. Both the U.S. Attorneys Office and the Louisiana Attorney General have encouraged the community to report suspected fraud. Search arrest records and find latests mugshots and bookings for Misdemeanors and Felonies. PPP Loans in Raceland, LA - Page 13. A locked padlock In January, the U.S. Attorneys Office for the Eastern District of California obtained the first settlement in a Paycheck Protection Program civil enforcement case, against an online retailer called SlideBelts Inc. SOUTHERN CLASSIC OF FARMERVILLE LLC. I dont know why it is that that some people take advantage of a program like this in a time of crisis. In fraud cases where there is no apparent misuse of a loan, civil enforcement may be more likely than criminal prosecution. 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. Act 311 of the 2020 Regular Session of the Louisiana Legislature allocated federal CARES Act funds to provide grants of up to $15,000 to eligible small businesses through a program administered by the Louisiana Department of Treasury. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. In Louisiana, a federal grand jury recently indicted a Plaquemine woman named Lestreonia Rodrigue on fraud charges. 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. An official website of the United States government. In less than six months, more than 50 people have been charged with allegedly committing fraud in connection with the program. 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. 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. Its up to the SBA and the Justice Department to go after anyone caught stealing PPP money. In the three decades since the laws passage, there have been only six whistleblower settlements involving FIRREA, yielding $19.9 billion in recoveries, but only $9.3 million in rewards to whistleblowers, according to Whistleblower Network News. Who in Louisiana got Paycheck Protection Program loans during the pandemic? Not all those loans were necessarily fraudulently obtained. These are not simple or easy cases to investigate and charge, then-acting Assistant Attorney General Brian Rabbitt said at a press conference last September. She's accused of making up fake businesses to collect more than $20,000 through. Sen. J.D. For more information on the Department of Justices response to the pandemic, please visit https://www.justice.gov/coronavirus. According to todays indictment, EVERY created a fictitious business called Natural Hair Afro, LLC, Houma, LA 70360 and used this fictitious business name on nearly all of the fraudulent PPP loan applications. The DOJ says this ill-gotten money was in many cases used to buy luxury personal items like cars, homes, vacation trips, and jewelry. 217,332 TOTAL PPP LOANS. The agencys Assistant Inspector General for Investigations Brian Grossman told POGO that not all of the referrals relate to the COVID-19 relief lending programs, but many of them do.. SOUTHERN MAGNOLIA LANDSCAPING LLC. Red Flags: The First Year of COVID-19 Loan Fraud Cases, $189 Billion in Questionable Paycheck Protection Program Loans, With over $189 billion in questionable Paycheck Protection Program loans, law enforcement has just scratched the surface, By 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. 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. But, in the Economic Injury Disaster Loan program, the Small Business Administration has not conducted robust data analysis to find instances of loans and grants that may have been fraudulently obtained, according to the Government Accountability Office. 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. Unfortunately, the owners of Victoria Nails & Spa saw this program as their own personal piggy bank. 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. 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. 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