With such vast sums of potentially forgivable loans available on such a large scale – and during times of crisis when it might seem like the government is looking the other way – fraud was bound to occur. Now, some of those cases are coming to light. And the charges are nothing to bat an eye at. They range from bank and wire fraud to identity theft, conspiracy and tax evasion.
A few examples:
- A North Carolina man is facing federal charges of wire fraud and bank fraud after obtaining more than $400,000 in EIDL and PPP loans using allegedly falsified documents.
- A Minnesota man was charged with wire fraud and money laundering after obtaining nearly $850,000 in PPP funds for a business that’s allegedly defunct.
- A Texas business owner is facing charges of wire fraud, money laundering and false statements for obtaining $1.5 million in PPP funds that he allegedly spent on personal luxuries.
- In one of the more egregious cases, a Los Angeles business owner allegedly secured more than $9 million in fraudulent loans, much of which he gambled away during a trip to Las Vegas.
These cases are just the tip of the iceberg. Many more are likely to follow. Some speculate that we’re on the brink of a wave of scandals involving the “big fish” – large, well-off companies that took advantage of funds meant for small businesses. The Department of Justice emphasized its commitment to cracking down on fraudulent use of COVID relief funds, and the FBI established a task force dedicated to investigating these cases.
One thing is certain: these charges (and the preceding investigations) shouldn’t be taken lightly. Like other types of federal fraud cases, those involving COVID relief funds pose harsh penalties. Convictions can result in mandatory minimum sentences that mean spending decades in federal prison.