Aqeel and others in the scheme allegedly used loan funds to pay individuals they claimed were employees but were actually fake employees, according to a court filing. Paycheck Protection Program Loan Recipients on the Department of Treasury's Do Not Pay List, January 11, 2021. . As further evidence of the DOJs continued focus on PPP loan fraud, the agency recently published a vacancy posting for Trial Attorneys who will be devoted to prosecuting cases under the CARES Act, including fraud under the PPP. The Justice Department has accused numerous defendants of using Paycheck Protection Program loans for unlawful purposes, such as purchasing private planes, sports cars, and taking pricey trips to Las Vegas casinos. The National Law Review - National Law Forum LLC 3 Grant Square #141 Hinsdale, IL 60521 Telephone (708) 357-3317 ortollfree(877)357-3317. The fraudulent applications resulted in a total of $975,582 in SBA-backed funds being loaned under the PPP. 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. Aqeel used some of the proceeds to purchase a Lamborghini sports car, according to the Justice Department. Individuals and companies targeted in PPP loan fraud investigations should engage federal defense counsel promptly, and they should work with their counsel to build sound defense strategies. Notably, while the DOJ is pursuing criminal charges in the substantial majority of its PPP loan fraud cases (including those discussed above), civil charges are a possibility as well. Overall, the size of the typical loan nationally was $206,000, according to the statistics. Nick also directs internal corporate investigations and he leads defense teams in whistleblower actions, corporate defense cases, as well as cases involving national security and elected officials. House Energy & Commerce Subcommittee Holds Hearing on U.S. Hunton Andrews Kurths Privacy and Cybersecurity. Email notifications are only sent once a day, and only if there are new matching items. On March 30, the Justice Department unveiled new charges against Joel Greenberg, a former Florida tax collector. PPP Loans List. Winds light and variable. But, he added, the CARES Act removed that control, calling it a pivotal change.. The PPP / Cares Act that was put in place to help business affected by Covid-19. 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. An attorney for Aqeel, Tommy T. Mingledorff, told POGO by email that these allegations are denied. PHOTO GALLERY | Windber girls pull away from Tu, PHOTO GALLERY | Berlin Brothersvalley girls lea, Heavy snow hits Northeast as storm cleanup begi, Penn State wrestling | Seven Nittany Lions reac, READ LISTS: Emergency PPP loans reach numerous local small businesses, Grub Shack set to open in April in downtown Johnstown, Bedford studio destroyed, nearby buildings damaged by fire, 19 wrestlers from area crowned Keystone State Central champions, Renovations unveiled, memories relived at Windber's Grand Ballroom, Sheetz set to replace Galliker's products at more stores in March, PHOTO GALLERY | Crossman's big night leads Penn Cambria girls to District 6-4A gold, Conemaugh Valley standouts Chase, Davison announce college intentions, Superior Court denies appeal from inmate convicted in fatal wrong-way DUI crash, PHOTO GALLERY | Defense leads Greater Johnstown past Central in 4A title game. 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. provided fully guaranteed SBA loans for certain eligible small businesses, individuals, and . Michigan PFAS Challenge Arguments Briefed For The Court. The Future of Stablecoins, Crypto Staking and Custody of Digital White House Climate and Environmental Justice Screening Tool. SBA has fired employees and contractors who were involved in approving loans to themselves or who inappropriately influenced loan approval. As some of its recent cases show, the DOJ is targeting individuals as well as businesses, and it is targeting loans well below the Treasurys $2 million audit threshold: Former Mayoral Candidate Charged with Obtaining Fraudulent $323,000 PPP Loan In March 2021, the DOJ charged a former mayoral candidate in Georgia with fraudulently obtaining in excess of $323,000 under the PPP. 7352 and H.R. 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. 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 Small Business Administration has released new details on more than 11.7 million Paycheck Protection Program loans, shedding light on this year's list of recipients. 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. The hospitality industry would prefer to see the federal government give them targeted grants, similar to those provided to the airline industry, Longstreet said. At this point, theres no obvious indication that Congress is going to act on it, Denlinger said. Associate The Small Business Administration has released a list of businesses that have received emergency pandemic loans. The oversight failures of the last year have become increasingly clear, eventually leading to changes. Any legal analysis, legislative updates or other content and links should not be construed as legal or professional advice or a substitute for such advice. Another round of PPP funds is needed because with the resurgence of COVID-19, businesses are seeing revenue fall again. Report it to the Small Business Administrations with just a few clicks. If you do nothing, you are giving implied consent to the use of cookies on this website. 2) Strengthen SBA controls to ensure that loans to ineligible recipients are not forgiven. In 111 instances, the zip code in the Small Business Administrations data did not match the state provided. According to Grossman, the Small Business Administration watchdog official, all of our ongoing investigations involve individual borrowers rather than lenders. Too often those who fraudulently divert tax dollars in amounts below what is typically accepted by prosecutors are not fully held accountable, impacting agency programs and leaving the taxpayer footing the bill, he wrote. 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. The nonprofit MITRE Corporation found more than 85% of Paycheck Protection Program loan recipients did not indicate their race or ethnicity in their loan applications, Earlier this year, the Biden administration revamped the Paycheck Protection Program loan application to encourage self-reporting of demographic data and better illustrate the impact the PPP is having across various population segments. But the Small Business Administration acknowledged, as of late March, there is still limited demographic data on PPP borrowers.. Attorney Advertising Notice: Prior results do not guarantee a similar outcome. Another large identity theft case led to charges against Jeremie Saintvil of Delray Beach, Florida in March. So were trying to reverse that. This program provides small businesses with funds to pay up to 8 weeks of payroll costs including benefits. Dirty Steel-Toe Boots, Episode 16: Investigations and the OSH Acts DOE Issues FOA for Carbon Capture Large-Scale Pilots and Carbon A Forward Look at IRAs Sweeping Impact on the EV Sector [PODCAST]. The involvement of a Small Business Administration employee in a pandemic loan fraud case raises questions about the agencys vetting of employees. disaster-relief related fraud targeting SBA programs, among other white-collar offenses. 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. Weve had many restaurants take advantage of it, Longstreet said. 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. 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. Funds can also be used to pay interest on mortgages, rent, and utilities. More than half of that amount$246 millionactually went to accused fraudsters. The CARES Act precluded the agency from exercising one important check on fraud in the Economic Injury Disaster Loan program. 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. 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. Irvine, CA: Irvine, CA. The . 1,270,615 TOTAL PPP LOANS. However, the Trump administrations Justice Department also sought to assuage companies concerns, especially in regard to qui tam False Claims Act lawsuits. Help us crowdsource fraud detection in the PPP program! 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. Given the DOJs efforts to target PPP loan recipients as well as the substantial risks of criminal prosecution in these cases, what do PPP loan recipients need to know? Yet if there is sufficient evidence, the government can still seize stolen money even in the absence of criminal charges. 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. See our documentation for more information. 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. As of September 2020, Congress had already identified billions of dollars in suspect loans issued under the PPP; and, in the months since, the U.S. Department of Justice (DOJ) has continued to pursue fraud investigations targeting PPP loan recipients across the country. If you have any compliance- or enforcement-related concerns, the contacts below are available to answer questions and provide guidance. Clients from more than 45 U.S. states have hired Nick to seek effective protection against government You are responsible for reading, understanding and agreeing to the National Law Review's (NLRs) and the National Law Forum LLC's Terms of Use and Privacy Policy before using the National Law Review website. That situation may arise in cases of apparent fraud involving Economic Injury Disaster loan advance grants of $10,000 or less. Low 33F. NLR does not answer legal questions nor will we refer you to an attorney or other professional if you request such information from us.