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. 4400 Massachusetts Ave. NW In one of the most complex cases to emerge since POGOs original analysis, at least seven individuals were indicted in a scheme that allegedly involved over 80 applications seeking a total of $30 million in Paycheck Protection Program loans. With limited oversight and limited eligibility criteria, the program was a prime target for fraud. 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. Data analysts at the inspector generals office have been combing through Paycheck Protection Program and Economic Injury Disaster loan data to look for markers of potential fraud, such as repeat loan applicants from the same physical addresses, Grossman told POGO. So were trying to reverse that. As EPA continues to move toward identifying PFAS as Hazardous Is an OSHA Workplace Violence Standard for the Healthcare Industry on Yellen Calls on World Bank to Take Decisive Action on Climate Change, To Volunteer or Not: The Role of Community Association Board Members. 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. They determined that a lot of the folks that they have as subjects of their investigations in HHS OIG [for Medicare and Medicaid fraud], were also committing PPP and EIDL fraud, Grossman said. An estimated 1% of that 2009 stimulus was lost to fraud (some claim the rate is even lower than that). In 111 instances, the zip code in the Small Business Administrations data did not match the state provided. Click on a company's name to see additional loan details. 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. 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. An indictment includes text and email messages involving creating tax records for some of the companies. A picture from that stay shows Pape and Jung celebrating over sparkling wine. Jungs attorney declined to comment, and Papes attorney did not respond to a request for comment. As part of its own COVID-19 relief spending tracker 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. The program provided those loans to 146,000 state businesses, an average of just under $35,000 per business. That new law permitted SBA to require additional information from applicants, such as tax returns, for loans and advances as part of its verification, according to Shear of the Government Accountability Office. 9 AVG COMPANY SIZE. 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. The Health AI Frontier: New Opportunities for Innovation Across the FTC to Hold Workshop on Recyclable Claims. $81,188 AVERAGE PPP LOAN. But even with an allegedly corrupt insider, a loan system with adequate checks should have prevented Greenbergs loans from being approved. The offices 44 investigators have been working at least three times the caseload that theyre usually used to working. The FBI, Secret Service, Homeland Security Investigations, and other offices of inspectors general are also part of the federal law enforcement effort. And this is not the only case. Using a telemarketing scheme called My Buddy Loans, the telemarketing scheme exploited those seeking assistance during the COVID pandemic, including many who were over the age of 55, according to a Small Business Administration inspector general agent quoted in a Justice Department press release. But such gaps can create ambiguities that muddy the waters in overseeing spending., Still, much can be done with the data that does exist. The Small Business Administration generally defines small businesses as those with 500 employees or fewer. 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. In email and text exchanges, defendants acknowledged that a number of the companies did no legitimate business, disqualifying them from receiving the loans. While the U.S. Department of the Treasury focused on auditing all PPP loans of $2 million or greater (it would also spot check smaller PPP loans), the DOJ did not choose to limit its focus in this way. In many cases, it will be possible to avoid facing charges with a proactive approachalthough this could prove challenging if the DOJ has already obtained clear evidence of intentional PPP loan fraud. Partner & Co-Chair Each record represents a loan made from a commercial lending bank to a small business and backed by the federal government. Its make or break time for many of them, he said. DC Circuit to Disputes Ancillary to Patent Matters: You Cant Sit Consumer Fraud PFAS Cases Continue To Rise. Two of the companies, Symbiont Retailers and Horizon Enterprises, were not in good standing before the Paycheck Protection Program began. While not all of these new reports can be attributed to the government relief effort, they are a sizeable share of the increase., Similarly, a February report by the Pandemic Response Accountability Committee stated that Identity theft is on the rise and has been exploited by bad actors to obtain pandemic response funds, such as unemployment insurance benefits, PPP loans, and EIDLs., Grossman told POGO, There are also PPP and EIDL cases were aware of that are being investigated by state and local authorities, because my agents out in the field get calls from state police and local police departments, where they have received complaints from citizens on identity theft, for example.. Red Flags: The First Year of COVID-19 Loan Fraud Cases, $189 Billion in Questionable Paycheck Protection Program Loans, With over $189 billion in questionable Paycheck Protection Program loans, law enforcement has just scratched the surface, By 3) Review prepayment and pre-award procedures and work with Treasury to formulate 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. This table shows the top 5 industries in California by . 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]. See our documentation for more information. Seven of the approved loans were processed by Cross River Bank, a top Paycheck Protection Program lender that closely allied itself with financial technology firms. 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. One case involved applications for hundreds of allegedly fraudulent Economic Injury Disaster loans and at least a $1.3 million loss to the federal government. Even if the debt is cleared, the loans can end up wreaking havoc on individuals and businesses credit scores. Thats because, at least in part, its optional for loan applicants to supply that information. While demonstrating lack of intent may be enough to prevent criminal prosecution in some cases, unintentional fraud is still a civil offense under the False Claims Act, FIRREA, and other federal statutes. POGO was unable to reach Edwards before publication. We expect to go to trial because of the serious nature of this matter.. Normally, our agents work a contract or procurement fraud case those can take several years to investigate, Grossman said. 107 of the cases, accused individuals allegedly falsified payroll documentation to justify either getting a loan or getting a bigger loan than they were eligible for; 93 of the cases, accused individuals allegedly created fake tax documents used for verifying details in loan applications; 41 of the cases, accused individuals allegedly created bogus companies to get loans; 28 of the cases, accused individuals allegedly used defunct companies to get loans; 20 of the cases, accused individuals used stolen identities or aliases while applying for loans; 12 of the cases, accused individuals allegedly falsified ownership of existing legitimate businesses; 28 of the cases, accused individuals also obtained Economic Injury Disaster loans (some of these individuals have been accused of fraudulently obtaining these loans. The data release includes . Previously, the SBA announced $15 billion in loans worth more than $150,000 had. At $367 billion, the amount of disaster funds provided through the EIDL COVID program is more than three times the amount of disaster loan funds approved for all disasters combined since the SBA was created in 1953, wrote Jovita Carranza, then-head of the Small Business Administration, in December 2020. Find out how you can get involved and stay up to date with our work. As of this month, weve seized over $580 million from over 23,000 fraudulent EIDL loans., Weve got a process in place that once weve identified, for instance, a bank account that has money sitting in it, that was deposited through a fraudulent EIDL loan, we contact the Secret Service, and they have a method to go in and seize those funds, Grossman said. He said that lenders have been extremely cooperative during investigations and their suspicious activity reports have been very useful.. We also have compiled state-by-state files for download. The Trial Attorneys will join the DOJs Market Integrity and Major Frauds (MIMF) Unit, and the vacancy posting has an expected minimum commitment of two years. The Future of Stablecoins, Crypto Staking and Custody of Digital White House Climate and Environmental Justice Screening Tool. California has a total of 1,270,615 businesses that received Paycheck Protection Program (PPP) loans from the Small Business Administration. When facing a DOJ investigation, immediate defensive action is necessary. 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. But, in contrast to the False Claims Act where the reward is a minimum 10% of the recovery, FIRREAs whistleblower reward is capped at $1.6 million. Funds can also be used to pay interest on mortgages, rent, and utilities. 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. U.S. Small Business Administration 409 3rd St, SW. Washington DC 20416 | There is further data we're working on for the loans under $150k however so check back in the future for that. 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. The Department of Justice (DOJ) has been actively pursuing these cases. . 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. The Small Business Administration has released a list of businesses that have received emergency pandemic loans. (He also applied for a separate loan just days before being indicted.) Plastics industry insiders reveal the truth about recycling. Ryan Summers 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. Mobile Arbeit und regionale Feiertage was gilt? Since March 2020, the Department of Justice has publicly announced charges in numerous . Previously, the SBA announced $15 billion in loans worth more than $150,000 had gone to 26,000 businesses, an average of $577,000. California. Thats more than 10 times the fraud recoveries five years after the 2009 stimulus became law. 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. & Legislative Package Includes Bills to Advance Biofuels Research, PTO to Begin Issuing Electronic Patent Grants, OSHA to Expand the Use of Instance-by-Instance Penalties. The names and addresses of businesses receiving PPP loans greater than $150,000 were released in a public dataset. Instead, the DOJ undertook to prosecute any and all cases of apparent PPP loan fraud. According to an indictment, Sah submitted at least 15 fraudulent applications on behalf of at least 10 companies. project, POGO has been examining equitable access to government loans, grants, and contracts. 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. A check of Floridas Division of Corporations database would have revealed the companies had just been reinstated. The . The SBA now also conducts manual loan reviews for the largest loans in the PPP portfolio and a random sampling of other loans. Underscoring the tension between fraud prevention and disbursing assistance quickly, the added checks to verify information submitted by applicants have somewhat slowed the processing of loan applications. [More than half of small-business loans went to larger businesses, new SBA data shows] This searchable list shows information for businesses that received loans of more than $150,000, as reported . But, he added, the CARES Act removed that control, calling it a pivotal change.. If faced with a DOJ investigation alleging PPP fraud, business owners and other individuals must carefully assess their risk and build a defense that is tailored to the specific circumstances and allegations at hand. Both programs lacked basic anti-fraud safeguards and the Small Business Administration exercised insufficient oversight, according to the agencys watchdog, the Government Accountability Office, and congressional committees that have investigated the programs. Search. 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. Irvine, CA: Irvine, CA. Civil settlement is a possibility in some cases as well. The scandal is whats legal, not whats illegal.. Linda Miller, the deputy executive director of the Pandemic Response Accountability Committee, told Federal News Radio in September, My guess is when were all said and done, [the fraud rate is] going to be significantly higher than 5% in the case of the CARES Act. If it is just 5% of the combined $957 billion in Paycheck Protection Program loans and Economic Injury Disaster loans and advance grants, that would still be about $48 billion in fraud. 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. Blackout in Puerto Rico: Examining the federal response to the humanitarian and economic crises in Puerto Rico.
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sba loan investigation list of recipients