Allegations of Fraud and Abuse in Coronavirus Stimulus Relief
In an effort to curtail the financial impact of mandatory shutdowns due to the coronavirus outbreak, the federal government passed a $2.2 trillion stimulus package. The economic relief package, known as the Coronavirus Aid, Relief, and Economic Security (CARES) Act, included a combination of direct payments to American families and assistance for small businesses.
Part of the stimulus included a paycheck protection program (PPP). Through the paycheck protection program, the U.S. Small Business Administration (SBA) can issue a loan “that helps businesses keep their workforce employed during the Coronavirus (COVID-19) crisis.” According to the SBA website, loans would be forgiven “if all employees are kept on the payroll for eight weeks, and the money is used for payroll, rent, mortgage interest, or utilities.”
Almost as soon as the money was made available for small businesses, allegations of fraud and abuse began to surface. On May 5, the US Department of Justice (DOJ) issued a press release stating that they had charged two Rhode Island men with stimulus fraud. According to the statement, the men allegedly filed fraudulent bank loan applications seeking over a half-million dollars under the PPP for employees that did not exist.
On May 13, the Department of Justice filed bank fraud charges against reality TV personality Maurice Fayne, aka Arkansas Mo. According to the DOJ release, Fayne used the loan proceeds to purchase jewelry, child support, and other personal gains.
In Texas, an engineer was charged with “allegedly filing bank loan applications fraudulently seeking more than $10 million in forgivable loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.” As noted in the May 13 DOJ release, the engineer allegedly claimed he had 250 employees when he apparently had none.
Federal prosecutors announced charges against a Texas man on May 19. According to the information provided by the DOJ, the man sought $5 million in forgivable payroll protection loans for 400 fictitious employees. The man was charged with wire fraud, bank fraud, making false statements to a financial institution, and making false statements to the SBA.
A software engineer in Washington was charged with wire fraud and bank fraud after allegedly filing fraudulent bank loan applications. According to the release, the engineer sought SBA forgivable loans of over $1.5 million for payroll expenses that did not exist.
Fraud charges can be prosecuted at the state and federal level. A conviction for disaster-related fraud can result in prison time and high fines. If you are charged with fraud related to the Payroll Protection Program or any other coronavirus stimulus relief, you need to contact a knowledgeable fraud attorney immediately.
Attorney James Alston knows the severity of fraud charges. As a Harris County District Attorney, Mr. Alston was assigned to the Major Fraud Division, working to secure convictions against people who perpetrated wire fraud, bank fraud, mail fraud, and more. You need an attorney that knows how to prepare a strategic defense in your case and who will fight hard to get you a favorable outcome. Contact Houston fraud defense lawyer James Alston today for a free consultation.