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“This is going to be the biggest fraud in government history, the magnitude of which we will not know for many years to come,” said a former FBI agent of the Paycheck Protection Program — designed to help existing businesses stay afloat during the COVID-related downturn. (THREAD)
More than 75 businesses received loans of at least $150,000 from the coronavirus small business relief program but don’t appear to have existed before this spring or to have met other eligibility criteria for the program. https://www.miamiherald.com/news/coronavirus/article245559465.html
Collectively, the questionable loans, which are publicly reported as a range of values rather than a specific amount, totaled somewhere between $20 million and $50 million.
And no state produced more businesses flagged — in a joint investigation by @MiamiHerald/ @mcclatchy and the @acdatacollectiv — than Florida, which accounted for more than one out of every four businesses that fit the same pattern.
A number of the businesses have owners with checkered financial pasts, including some with multiple personal bankruptcies and others with prior convictions for fraud.
Former federal agents and prosecutors with whom we spoke expressed alarm at our findings and the lax fraud controls in the program.
“This is disturbing on all levels,” said a former Assistant Chief of the Criminal Division Fraud Section at the U.S. Department of Justice.
“This is disturbing on all levels,” said a former Assistant Chief of the Criminal Division Fraud Section at the U.S. Department of Justice.
Two newly created Florida businesses that got PPP loans have virtually no footprint — physical or digital — but appear to be connected to the same Florida family.
Each received loans of between $350,000 and $2 million, just days after registering the businesses with the state.
Each received loans of between $350,000 and $2 million, just days after registering the businesses with the state.
One business flagged in the analysis appears to have gotten two PPP loans, which is prohibited by the program rules.
Farther south in Texas, a network of five companies that received between $3.65 million and $8.7 million in PPP funds likewise appears suspicious.
The other four companies, which got loans in June, all indicated that they provided custom computer programming services.
The other four companies, which got loans in June, all indicated that they provided custom computer programming services.
KMS Traders Group, which received the largest PPP loan of all of the companies, between $2 million to $5 million, was registered six days after it was awarded the loan. The company indicated that the loan would save 97 jobs.
Vic Hartman, the former FBI agent, said he suspects that the program’s architects likely understood that some degree of fraud would be inevitable with the program, but that they would be able to reel back some of the fraudulently obtained money after it went out.
“It’s called pay and chase,” he said.
“You pay and then you chase all the fraudsters.” https://www.miamiherald.com/news/coronavirus/article245559465.html
“You pay and then you chase all the fraudsters.” https://www.miamiherald.com/news/coronavirus/article245559465.html
Investigative reporters @benbwieder and @MeghanBobrowsky along with help from the Anti Corruption Data Collective, a non-profit group of journalists and data scientists researching corruption, helped uncover potentially ineligible loans within the PPP program.
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