By Wayne D. Garris, Jr.
The Paycheck Protection Program provides small businesses with forgivable loans to use for payroll, mortgage interest, rent, and utilities during the COVID-19 pandemic.
On May 19, 2020, DOJ announced that it has filed criminal charges against a Texas man who allegedly filed fraudulent bank loan applications seeking over $5 million in Paycheck Protection Program (PPP) loans. This is the second time in less than a week that the Justice Department has charged a Texas man with fraudulently seeking PPP funds.
According to unsealed court documents, the defendant allegedly made two fraudulent applications for loans through the PPP. In the first application, the defendant claimed to have 400 employees and an average monthly payroll of $2 million. In the second application, he claimed to have 100 employees and was able to obtain a loan for over $500,000. The complaint alleges that the defendant used a random name generator on the internet to produce a list of fake employees and submitted forged tax documents with each application. The press release did not indicate the nature of the defendant’s alleged fraudulent business.
The 32-year-old defendant from Maud, Texas, was arrested on May 19 and faces charges of wire fraud, bank fraud, false statements to a financial institution, and false statements to the SBA.
“Today’s arrest should serve as a strong deterrent to anyone considering exploiting the COVID-19 pandemic to enrich themselves through fraud,” said Special Agent in Charge Ryan L. Spradlin of U.S. Immigration and Custom’s Homeland Security Investigations (HSI) Dallas. “These individuals have no concern for legitimate businesses whose employees and their families are hurting financially during these unprecedented times.”
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