All totaled, in that city of 43,000 people lenders approved $1.3 million dollars just for barbershop owners. 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. PPP Loan Recipient List By State . Public Service Announcement on Sexual Assault in Public Housing. BATON ROUGE, La. 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. U.S. Attorney's Office, Eastern District of Louisiana, Former Louisiana Woman Indicted for Preparing Over 110 Fraudulent PPP Loans Totaling Over $1.1 Million Dollars, 2_ecf_doc_1_-_sharnae_every_indictment_redacted_sanitized.pdf, Dr. Charles J. Southall, III Sentenced to 60 Months in Prison for Money Laundering, Obtaining Over $889,000 Through Fraud, New Orleans Man Sentenced for Theft and Sale of Motor Vehicle from Mississippi Car Dealership, Two More New Orleans Residents Sentenced in Staged Automobile Collision Scheme, Former Louisiana Woman Indicted For Preparing Over 110 Fraudulent PPP Loans Totaling Over $1.1 Million Dollars. 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.. The PPP was developed to ease the pain of COVID-19 economic restraints on working Americans. It Got a PPP Loan. 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. The Department of Justice confirms they are looking into reports of PPP fraud across the nation. 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. I dont know why it is that that some people take advantage of a program like this in a time of crisis. 66625. [1] As the introductory phrase signifies, the entirety of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation. Copyright 2020 WAFB. The loans have to be repaid with low interest. A picture from that stay shows Pape and Jung celebrating over sparkling wine. Jungs attorney declined to comment, and Papes attorney did not respond to a request for comment. The lender got to keep a fee based on the size of the loan. 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. Eastern District of Louisiana 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. According to Grossman, the Small Business Administration watchdog official, all of our ongoing investigations involve individual borrowers rather than lenders. AGs Office announces more than 50 arrests connected to Paycheck Protection Program fraud, LSU WR Malik Nabers arrested in New Orleans; prosecutors refuse to charge with condition, Mini workshop to bust myths surrounding sexual health, Experts give tips to prepare for daylight saving time, Health Minute: First at-home flu and COVID test authorized. If approved, the SBA pays the lender back using federal funds. We expect to go to trial because of the serious nature of this matter.. An official website of the United States government. In 111 instances, the zip code in the Small Business Administrations data did not match the state provided. We hear reports of arrests and arraignments for PPP loan cases involving only $10,000 or $15,000. In addition to automated checks against existing government databases, lenders could have conducted online searches or called businesses neighboring a loan applicant to help establish whether the company seeking the loan is real or is the size it claims to be. The PPP loans are forgivable under certain conditions and the loan forgiveness is not taxable income for federal tax purposes. As the lending programs ramped up last summer, there was a spike in suspicious activity reports from banks and other lenders flagging potential fraud. 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 6 AVG COMPANY SIZE. Otherwise, the borrower is on the hook for the money. . The forgivable loans were meant to cover payroll for employees and, later, other eligible expenses at a time when customers werent coming in. 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. woman indicted for preparing 110 fraudulent PPP loans. Pursuant to the CARES Act, the amount of PPP funds a business is eligible to receive is determined by the number of employees employed by the business and their average payroll costs. Representative James Clyburn (D-SC), chair of the House Select Subcommittee on the Coronavirus Crisis, said in the March 25 hearing that the Trump administration ignored flags of potential fraud in the Economic Injury Disaster Loan program, and approved loans in batches with little to no vetting and abandoned a rule that required two SBA employees to approve each loan application., The Trump administration ignored flags of potential fraud, While a year has passed since the CARES Act became law and there are more checks now, government watchdogs say the Small Business Administrations oversight of the lending programs is still inadequate. 2020 Louisiana Individual Income Tax returns and payments are due Monday, May 17, 2021. If you look at the last round [of PPP] and you look at it on a time series, it almost looks like the largest businesses and businesses in high-income neighborhoods received money first and smaller businesses and businesses in low-income neighborhoods received money last, the Small Business Administrations Michael Roth told Politico in March. And these cases are just the beginning. ), My guess is when were all said and done, [the fraud rate is] going to be significantly higher than 5% in the case of the CARES Act.. Not all the blame can be placed at the Small Business Administrations feet. Many believe a high percentage of these grants were stolen, but some federal prosecutors with heavy caseloads may find it hard to justify ) or https:// means youve safely connected to the .gov website. 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. Complaints can also be filed online here. (He also applied for a separate loan just days before being indicted.) A Project On Government Oversight (POGO) review of court filings up to April 2, 2021, found that the charged individuals allegedly sought a total of nearly $445 million in Paycheck Protection Program loans. On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. Using a telemarketing scheme called My Buddy Loans, the telemarketing scheme exploited those seeking assistance during the COVID pandemic, including many who were over the age of 55, according to a Small Business Administration inspector general agent quoted in a Justice Department press release. Not all those loans were necessarily fraudulently obtained. The PPP was developed to ease the pain of COVID-19 economic restraints on working Americans. 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. Louisiana Workforce Commission Suspected Fraud Form. 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. To disguise the fraud, family members moved the proceeds through several bank accounts held in different names, according to the Justice Department. On March 30, the Justice Department unveiled new charges against Joel Greenberg, a former Florida tax collector. Thats because, at least in part, its optional for loan applicants to supply that information. Whether bad faith was involved is another matter. 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.. 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. Nick Schwellenbach is a Senior Investigator at POGO. 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. 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. In July, the agencys inspector general warned of potentially rampant fraud in the Economic Injury Disaster Loan program. All rights reserved. Secure .gov websites use HTTPS This table shows the top 5 industries in Louisiana by number . 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. Jean Rabbittand Kevin Aguilarwere charged with bank fraud and conspiracy to engage in monetary transaction charges. 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. He said that lenders have been extremely cooperative during investigations and their suspicious activity reports have been very useful.. Help us crowdsource fraud detection in the PPP program! Theres a lot of red flags that they look at in the data to help us determine if its something we need to look at deeper.. The defendants were arrested this morning. In July, banks filed nearly seven times the average number of suspicious activity reports. The Small Business Administration has released a list of businesses that have received emergency pandemic loans.. The Small Business Administration has released a list of businesses that have received emergency pandemic loans. 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. The case led to criminal charges, including aggravated identify theft, filed in Texas in February. Sah, who pleaded guilty on March 24, used the funds to buy a Bentley convertible and multiple homes, among other things. The amounts varied from less than $2,000 to more than $20,000. 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. Using that public data, the 9 News Investigators took a close look at PPP loans given out in Louisiana. 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. 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. 2020 Louisiana Individual Income Tax returns and payments are due Monday, May 17, 2021. ggdc fulfill service phone number; copenhagen, denmark circle houses for sale; living together in kuwait; brandi carlile brother jay; houston film festival; terrenos de venta en palmview, tx; louisiana ppp loan arrests. 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. Nearly a dozen of those people took out two loans. Louisiana has a total of 217,332 businesses that received Paycheck Protection Program (PPP) loans from the Small Business Administration. In fraud cases where there is no apparent misuse of a loan, civil enforcement may be more likely than criminal prosecution. The addresses listed for the two companies, according to SBA loan data, also do not match the addresses in the states corporation recordsyet another sign of potential fraud. 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 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. 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. 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. Some investigations begin with complaints received through the watchdogs hotline, and others come from referrals by federal agencies or state and local law enforcement. Does something look fishy to you? 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. Aqeel used some of the proceeds to purchase a Lamborghini sports car, according to the Justice Department. But, he added, the CARES Act removed that control, calling it a pivotal change.. The rebates, funded by the CARES Act, are subject to Louisiana state income tax. These cases further highlight the ways individuals appear to have taken advantage of lax oversight in the program. 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. 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. The Small Business Administration has said victims of identity theft will not have to repay the loans fraudulently obtained in their name, but some individuals have told media outlets the agency has not promptly resolved their cases. are moving. Shes accused of making up fake businesses to collect more than $20,000 through a PPP loan and another $500,000 in prepaid debit cards through unemployment claims. Grossman said his office has shared data with the Department of Health and Human Services Office of Inspector General, which identified some repeat offenders. In 2020, applicants could not lawfully receive more than one Paycheck Protection Program loan. 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. GOODWILL INDUSTRIES OF NORTH LOUISIANA, INC. BIOMEDICAL RESEARCH FOUNDATION OF NORTHWEST LOUISIANA, ROSS H DIES DDS & BENJAMIN A BEACH DDS, LLC, Agriculture, Forestry, Fishing and Hunting, Professional, Scientific, and Technical Services, Administrative and Support and Waste Management and Remediation Services, Other Services (except Public Administration). The PPP loan was created through the March 2020 CARES Act as a lifeline for businesses struggling through the coronavirus pandemic. But, in contrast to the False Claims Act where the reward is a minimum 10% of the recovery, FIRREAs whistleblower reward is capped at $1.6 million. Civil enforcementwhere the evidentiary burden is lower than in criminal casesis another way of holding individuals and companies accountable. 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. The scale of lending means the potential amount of Economic Injury Disaster loan fraud is staggering. The Small Business Administrations Office of Inspector General found a significant gap in the agencys data on underserved markets, such as ethnicity, veteran status, and women-owned businesses. 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. Faa sua busca no site. The National Center for Disaster Fraud (NCDF) is in Baton Rouge and reports can be filed here. All rights reserved. However, industry insiders say the barbershop industry is largely cash-based, making it easy to operate under the radar. 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.. An indictment includes text and email messages involving creating tax records for some of the companies. 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. 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. 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 SOUTHERN MAGNOLIA LANDSCAPING LLC. A locked padlock IRS-Criminal Investigation remains dedicated to working with our law enforcement partners to ensure that these types of fraud are investigated and the offenders are punished to the fullest extent of the law.. PPP Loan Recipient List By State Louisiana 217,332 TOTAL PPP LOANS $12.2B TOTAL LOAN AMOUNT $56,095 AVERAGE PPP LOAN 6 AVG COMPANY SIZE Louisiana has a total of 217,332 businesses that received Paycheck Protection Program (PPP) loans from the Small Business Administration. We have a lot of qui tam cases that have been brought forward, Grossman told POGO, generally referring to False Claims Act complaints filed by private individuals. of Loans Jobs Retained U.S. Attorney Evans reiterated that the indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt. Its the first public case of fraud in these pandemic loan programs attributed to corruption within the agencys own ranks. 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. EVERY prepared and submitted false and fraudulent PPP sole proprietor loan applications via various online portals including, but not limited, to Blueacorn. 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. The PPP loan forgiveness is not subject to Louisiana state income tax. The involvement of a Small Business Administration employee in a pandemic loan fraud case raises questions about the agencys vetting of employees. The auditor found that the deficiencies were caused by an inadequate entity wide control environment.. 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. First Home Bank approved the $8.4 million loan, among the less than 0.1% of Paycheck Protection Program loans this large or larger (the maximum is $10 million). 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.. edgewater hotel haunted; can uk consultant doctors work in usa; is spitfire a compliment The Paycheck Protection Program saved millions of jobs. The Justice Department brought civil claims against the company under both the False Claims Act and Financial Institutions Reform, Recovery and Enforcement Act. 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. Firm estimates of fraud related to CARES Act spending, including the Paycheck Protection Program and the Economic Injury Disaster Loan program, may not be available until many more cases are brought and more analysis has been conductedpotentially years away. This map is your interactive guide to confirmed cases, recoveries and deaths from the coronavirus around the state, nation and world. Help us crowdsource fraud detection in the PPP program! 3 Defendants Arrested For Over $13 Million Fraud Scheme To Obtain Loans Intended To Help Small Businesses During COVID-19 Pandemic Three Family Members Arrested for Misrepresenting Employee Payroll Figures to Receive COVID-19 Loan Funds for Chain of Family-Owned Nail Salons in New York Metropolitan Area and Other Businesses If a company is eligible for a loan and submits certifications in good faith, that company will have nothing to fear from the Civil Division. 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. Pape and Jung used more than $3600 from the fraud scheme to pay for a stay at a resort in San Antonio, Texas, according to the Justice Department. The CARES Act precluded the agency from exercising one important check on fraud in the Economic Injury Disaster Loan program. A borrower applied for a PPP loan from a lender or bank. Maurice Kamgaing, 41 sent PPP loan . 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. Nearly seven times the average number of suspicious activity reports loans are forgivable under certain conditions and the loan SBA. Sah, who pleaded guilty on March 30, the Justice Department civil... $ 20,000 not respond to a request for comment picture from that stay shows Pape and celebrating. 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