46. 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. Some investigations begin with complaints received through the watchdogs hotline, and others come from referrals by federal agencies or state and local law enforcement. The DOJ is targeting individuals and businesses in PPP loan fraud investigations, and it is targeting those who received loans of all sizes. The data contains all original variables and new variables added with minimally, consistently, and confidently normalized character strings. disaster-relief related fraud targeting SBA programs, among other white-collar offenses. 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. 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. SBA-OIG Investigations Relating to PPP Loan Fraud And if theyre not interested in prosecuting, for whatever reason, we dont further pursue it at that time., Many of the cases are moving quickly, despite their complexity. Generally, cases where there is any substantial gray areasuch as a lack of unambiguous evidence of fraud or when it wasnt clear what a government rule requiredare far more likely to lead to civil enforcement, or to no enforcement. Anti-Corruption, Kevin M. Toomey (In late March, the Justice Department told Congress that it had charged $446.8 million in losses related to PPP. Some of these cases may still be under seal and charges are routinely being unsealed.) But such gaps can create ambiguities that muddy the waters in overseeing spending., Still, much can be done with the data that does exist. Investigating Power is a history of breakthrough investigations that revealed news and changed the national narrative on many major topics since the 1950s, from war to health to civil rights. In other words, lenders and the Small Business Administration did not prevent the alleged fraud in these instances before taxpayer dollars went out the door. These are not simple or easy cases to investigate and charge, then-acting Assistant Attorney General Brian Rabbitt said at a press conference last September. In addition to helping head off further fraud, conducting robust data analysis could also help the Small Business Administration assess how well its relief programs are reaching small businesses in underserved communities, such as those owned by people of color. Download state-by-state PPP loan data - Investigative Reporting Workshop However, the Trump administrations Justice Department also sought to assuage companies concerns, especially in regard to qui tam False Claims Act lawsuits. The release comes as Congress is debating whether to pass another round of federal stimulus and whether that would mean another round of the Paycheck Protection Program. ), 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.. PPP Loan Recipient List By State . One percent of the recovery acts $501 billion in spending would be about $5 billion. Find out how you can get involved and stay up to date with our work. If you require legal or professional advice, kindly contact an attorney or other suitable professional advisor. Overall, the size of the typical loan nationally was $206,000, according to the statistics. Sah submitted falsified tax and payroll documentation in which he claimed to have numerous employees and hundreds of thousands of dollars in payroll expenses, according to a Justice Department press release, but none of the businesses he sought loans for had any employees. 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. Analyzing that data for red flags is a way to identity subsets of loans and grants that warrant closer scrutiny and to help direct scarce investigative resources. 2) Strengthen SBA controls to ensure that loans to ineligible recipients are not forgiven. Partner & Co-Chair SBA releases details on PPP loans - Investigative Reporting Workshop Not all those loans were necessarily fraudulently obtained. 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. Sah, who pleaded guilty on March 24, used the funds to buy a Bentley convertible and multiple homes, among other things. With limited oversight and limited eligibility criteria, the program was a prime target for fraud. Low 33F. If you look at the last round [of PPP] and you look at it on a time series, it almost looks like the largest businesses and businesses in high-income neighborhoods received money first and smaller businesses and businesses in low-income neighborhoods received money last, the Small Business Administrations Michael Roth told Politico in March. The Small Business Administration distributed 5.8 million advance grants worth $20 billion last year (despite the name, these are not loans that have to be repaid). 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]. To support his loan applications, Kindambu claimed that Papillon Holdings had $150,000 in monthly payroll expenses and that Papillon Air had over $850,000 in monthly payroll expenses. Inaccuracies in the data or missing data can undermine oversight. 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. PPP recipient list: Which companies got PPP loans? - The Business Journals The charges followed the guilty pleas of five other individuals involved in the alleged scam. Man Charged with Obtaining Nearly $2 Million Through Multiple Fraudulent PPP Loan Applications Also in January 2021, the DOJ charged a Nevada man with submitting multiple fraudulent loan applications to multiple PPP lenders. In 111 instances, the zip code in the Small Business Administrations data did not match the state provided. 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. The fraudulent applications resulted in a total of $975,582 in SBA-backed funds being loaned under the PPP. General Litigation. Another round of PPP funds is needed because with the resurgence of COVID-19, businesses are seeing revenue fall again. The Justice Department has brought criminal charges against at least 209 individuals in 119 cases related to Paycheck Protection Program (PPP) fraud since banks and other lenders began processing loan applications on behalf of the Small Business Administration on April 3, 2020. He warned that increased loan volume, loan amounts, and expedited loan processing timeframes may make it more difficult for SBA to identity red flags in loan applications. The inspector general called for the agency to put in place sufficient controls, but the agency did not heed the watchdogs warnings at that time. Some of these qui tam lawsuits are traditional whistleblower cases, but others involve individuals who are slicing and dicing the data that has been made available about loans, according to Grossman. NLR does not answer legal questions nor will we refer you to an attorney or other professional if you request such information from us. But because the Department of Justice has made PPP and EIDL a priority we are seeing results from DOJ rather quickly in a lot of our investigations., Others in government have also remarked on how fast many of these cases Two of the companies, Symbiont Retailers and Horizon Enterprises, were not in good standing before the Paycheck Protection Program began. The Small Business Administration generally defines small businesses as those with 500 employees or fewer. NIOSH Announces Publication of Article on the Results of 2019 Survey of Ogletree, Deakins, Nash, Smoak & Stewart, P.C. 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. There was a problem saving your notification. The law firm K&L Gates, however, wrote in December that since Congress allowed lenders to rely on borrowers self-certified information, that should decrease the likelihood that otherwise law abiding financial service providers would face government scrutiny for the fraudulent acts of their borrowers., The role of employees who become whistleblowers may emerge as a significant factor in civil Paycheck Protection Program cases. $103B TOTAL LOAN AMOUNT. Visas for F and M Students Can Now Be Issued 365 Days Ahead of Program Start Date, Supreme Court Clarifies the Meaning Salary Basis Under Federal Overtime Law. The average loan amount. Kindambu applied for two Paycheck Protection Program loans representing Papillon Holdings, Inc. and Papillon Air, Inc., according to court documents. Loans through that program were directly processed by the Small Business Administration, while in the Paycheck Protection Program, loans were primarily processed by banks and other lenders. The program has traditionally been used to help small businesses facing revenue loss in the wake of natural disasters. Click on a company's name to see additional loan details. If you would ike to contact us via email please click here. Both laws have provisions allowing whistleblowers to receive a reward for successful recoveries obtained for the U.S. government. As of this month, weve seized over $580 million from over 23,000 fraudulent EIDL loans.. Details on recipients of the Paycheck Protection Program are searchable on The Workshop's Accountability Project. 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. Banks and other lenders have been filing a huge number of suspicious activity reports to the Treasury Departments Financial Crimes Enforcement Network (better known as FinCEN) related to the Paycheck Protection Program and the Economic Injury Disaster Loan program. Newly released federal data show hundreds of emergency Paycheck Protection Program loans went to help the smallest of Johnstown businesses as they fought through the COVID-19 economic shutdown. There were additional steps that could have been undertaken that would not have significantly slowed downin our view in the oversight communitythe delivery of funds to the public, said Michael Horowitz, the Justice Departments inspector general and chair of the Pandemic Response Accountability Committee, in testimony before Congress on March 25.