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. Aqeel used some of the proceeds to purchase a Lamborghini sports car, according to the Justice Department. Weve had many restaurants take advantage of it, Longstreet said. Horowitz, the Justice Departments inspector general, recently testified to a House panel examining COVID-19 loan fraud that a legislative reform could help address the problem of fraud in smaller dollar amounts. The Government alleged that Christopher and Erin Mazzei submitted fraudulent loan applications and obtained over $1.3 million in COVID-19 relief funds. Business groups have been lobbying to get Congress to quickly pass legislation to reverse the IRS guidance, he said. Allegedly, the family sought, ultimately unsuccessfully, to use the funds to purchase a $3.7 million mansion in Disney Worlds Golden Oak gated community. The DOJ is Targeting All Types of PPP Loan Recipients The DOJ is targeting individuals and businesses in PPP loan fraud investigations, and it is targeting those who received loans of all sizes. PPP Loans List. If you have any compliance- or enforcement-related concerns, the contacts below are available to answer questions and provide guidance. More than 3,500 state businesses got loans worth more than $1 million, while 103 businesses and other entities took out PPP loans worth exactly $150,000. Justice and Commerce Departments Announce Creation of Disruptive United States Department of Justice (DOJ), Biden Executive Order 14091 Strengthens Equity for Federal Agencies. Leaders of statewide business groups said they think the first round of PPP loans were vitally important to help businesses survive the pandemic economic slowdown and said another round of loans are needed now. 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. Saintvils attorney declined to comment. The Small Business Administration has released a list of businesses that have received emergency pandemic loans. To disguise the fraud, family members moved the proceeds through several bank accounts held in different names, according to the Justice Department. The following data was provided by the SBA & US Treasury Department showing a breakdown of all the name of companies who received PPP loans over $150,000. Applicants fraudulently obtained at least $16 million, per the Justice Department. The 117th Congress enhanced the PRAC, IG community, and law enforcement partners' efforts to fight fraud in small business loan programs with its passage of H.R. Search. At this point, theres no obvious indication that Congress is going to act on it, Denlinger said. Specialized Freight (except Used Goods) Trucking, Local, Offices of All Other Miscellaneous Health Practitioners, Offices of Physicians (except Mental Health Specialists), Plumbing, Heating, and Air-Conditioning Contractors, Outpatient Mental Health and Substance Abuse Centers, Other Activities Related to Credit Intermediation, Nursing Care Facilities (Skilled Nursing Facilities), Internet Publishing and Broadcasting and Web Search Portals, Other Support Activities for Air Transportation, All Other Professional, Scientific, and Technical Services, Other Aircraft Parts and Auxiliary Equipment Manufacturing, Dry, Condensed, and Evaporated Dairy Product Manufacturing. 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.
Tax Preparer Charged with Submitting 118 Fraudulent PPP Loan Applications Also in March 2021, the DOJ filed charges against a South Florida tax preparer who is accused of submitting approximately 118 fraudulent PPP loan applications, on behalf of himself and his accomplices. According to the DOJ, the tax preparer falsified applicants income and expenses and submitted fraudulent tax forms. 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. 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. 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. 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. Officials from the Treasury Department and the Small Business Administration (SBA) have argued the program primarily benefited smaller businesses because a vast majority of the loans more. 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 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. Low 33F. Small Business Paycheck Protection Program The Paycheck Protection Program established by the CARES Act, is implemented by the Small Business Administration with support from the Department of the Treasury. 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.. The National Law Review is a free to use, no-log in database of legal and business articles. POGO was unable to reach Edwards before publication. The DOJ has pursued charges against large companies that received multi-million-dollar PPP loans, and it has pursued charges against individuals accused of obtaining six-figure PPP loans to finance lavish personal expenses. The inspector general offices workload has increased significantly, Grossman said. However, all of the DOJs PPP fraud investigations to date have shared a common thread: The agency has moved quickly in seeking to file charges, and it has shown little sympathy for those accused of unlawfully taking advantage of the PPP. Report it to the Small Business Administrations with just a few clicks. Find out how you can get involved and stay up to date with our work. 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. 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. According to the House Select Subcommittee on the Coronavirus Crisis, the SBA Office of Inspector General has received nearly 750,000 referrals of suspected identity theft related to the program over the last year. 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. You may change your cookie settings at any time. In April 2016, at the height of the deadliest drug epidemic in U.S. history, Congress effectively stripped the Drug Enforcement Administration of its most potent weapon against large drug companies suspected of spilling prescription narcotics onto the nations streets. 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. But even with an allegedly corrupt insider, a loan system with adequate checks should have prevented Greenbergs loans from being approved. 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. Two years after going live, TAP hits a major milestone. In addition to allegedly submitting a fraudulent PPP loan application for a fictious [sic] business in his own name, Saintvil also allegedly stole the identities of eight elderly individualsseven of whom were residents of senior living facilities and one who was related to him, according to a Justice Department press release. The original allocation of $349 billion was depleted in just 13 days. But in March 2021, the Small Business Administration Office of Inspector General issued a report that found that lenders last year issued more than one Paycheck Protection Program loan to 4,260 borrowers with the same tax identification number and borrowers with the same business name and address. Those loans were worth a total of $692 million. We dont have the capacity to work everything that comes in, Grossman told POGO. Supreme Court Clarifies the Meaning Salary Basis Under Federal OIRA Calls for Feedback on Recommendations to Encourage More FTCs One-Two Punch on Data Tracking and Health Privacy. There are many potential cases the Justice Department may not prosecute. Normally, our agents work a contract or procurement fraud case those can take several years to investigate, Grossman said. If Congress amends the underutilized Program Fraud Civil Remedies Act, efforts by inspectors general to fight fraud in pandemic related spending would be enhanced, according to Horowitzs testimony. As of this month, weve seized over $580 million from over 23,000 fraudulent EIDL loans.. Greenberg is a friend of Florida Republican Matt Gaetz, and both were identified in a recent New York Times report as having allegedly paid women for sex, as well as potentially a 17-year-old girl. An attorney for Aqeel, Tommy T. Mingledorff, told POGO by email that these allegations are denied. General Litigation. According to the National Priorities Project, thats enough money to pay for both coronavirus vaccine doses for every American and 1.1 million full-time jobs at $15 an hour for an entire year. 7352 and H.R.
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