Small Business Owners (Real or Fake) Who Are Accused or Convicted of the Largest EIDL/PPP/CARES Act Fraud
Our Top 15 Zeroes of the Pandemic
As stated in an earlier post we published, “We recently polled over 1,400 BRP Onesta clients who own one or more small businesses. Of the responses we received, most (84.2%) were thankful of the PPP and EIDL programs, and many (68.3%) said it was not enough.”
However, some folks got greedy and got caught.
Our first interaction with someone who had committed PPP fraud was our client, Henry (Named Changed Because of NDA).
Henry ran a small trucking company with several trucks that had sustained some moderate growth in the time we worked with the company.
We had executed several truck loans for Henry’s LLC over a period of about 4 years. In July 2020, Henry asked us to work on financing for two more trucks which we happily agreed to help him and his company with. As usual, we asked for our credit application updated and several months of business bank statements. That is when things changed, and we realized things were a bit different…
The business was now in his sister’s name, and they were working with a new bank. Revenue was down over 80%. When we asked him about the change in owner and business bank account, he said that he changed banks because of fraud against his business and that his sister volunteered to steer the ship while he transitioned to a more active operations role. He said he was not sure about the decrease in revenue because his business is busier than ever.
So, customary in this situation, we Googled his business and BOOM – There it was…. Accused of PPP fraud at the tune of $1.01 Million.
So, what happened? Henry (or someone he hired) used his/their Adobe skills and generated false bank statements, tax returns and payroll statements. He was funded $1.1 Million for the first draw of PPP in May of 2020 –
How did he get caught? When Henry got funded, he started buying lavish items (Rolls Royce, new house via cash, jewelry) and paying off all his bills including lifetime alimony and child support. Someone who knew him then reported him to the police, and the rest is history – When the FBI raided his business, they recovered about $150K of his $1.01 Million he borrowed and would hopefully have forgiven. In September, Henry was sentenced to 17 years in Federal prison for a host of crimes, including PPP fraud.
The Greedy Get Greedier
However bad I thought Henry’s case was, there were others who were way greedier – and while some of these cases are still in litigation, some of what these people allegedly tried to get away blows my mind.
From the literature (Arnold & Porter have a nice data set) I compiled who were accused of the top 10 highest dollar Stimulus funds fraud. Some have been convicted, some still waiting but regardless, those who are convicted of doing so are the Real Frontline-Zeroes of the Pandemic.
Our Top Fifteen Alleged or Convicted List for Pandemic Relief Fraud
There are other people or groups of people who have been accused or convicted (some for more greedy amounts than below and can be found here: https://tinyurl.com/2d5rm823.
- ($14M) Apocalypse Bella (https://www.justice.gov/usao-sdny/pr/two-texas-men-and-one-oregon-man-charged-fraud-scheme-obtain-over-14-million-covid)
- ($11.1M) Amanda Christian (https://www.justice.gov/opa/pr/twenty-two-charged-connection-more-11-million-paycheck-protection-program-fraud-scheme)
- Charles Petty ($11.1M) (https://www.justice.gov/opa/pr/twenty-two-charged-connection-more-11-million-paycheck-protection-program-fraud-scheme)
- ($11.1) Charmine Redding (https://www.justice.gov/opa/pr/twenty-two-charged-connection-more-11-million-paycheck-protection-program-fraud-scheme)
- ($7.6M) Jacob Carter, Quadri Salahuddin, Anwar Salahuddin, Christal Ransom (https://www.justice.gov/usao-sdny/pr/four-defendants-charged-76-million-covid-19-fraud-scheme)
- ($7.2M) Don Cisternino (https://www.justice.gov/usao-mdfl/pr/seminole-county-man-charged-covid-relief-fraud)
- ($6M) Christopher Lick (https://www.justice.gov/usao-ndms/pr/starkville-man-charged-more-6-million-covid-relief-fraud-false-statements-and-money)
- ($5.8M) Julio Enrique Lugo (https://www.justice.gov/usao-mdfl/pr/davenport-couple-charged-58-million-covid-relief-fraud)
- (4.5M) Christina Burden (https://www.justice.gov/usao-ndca/pr/oakland-woman-charged-million-dollar-scheme-defraud-pandemic-relief-programs-struggling)
- ($3.8M) Gregory Blotnick (https://www.justice.gov/usao-nj/pr/new-york-and-florida-resident-charged-38-million-paycheck-protection-program-fraud-scheme)
- ($3M) Anuli Okeke (https://www.justice.gov/usao-edny/pr/two-former-employees-new-york-branch-major-bank-and-accountant-charged-cares-act-loan)
- ($2.2M) Abdreq Aaron Lloyd, Russell Schort (https://www.justice.gov/usao-or/pr/two-oregon-men-face-federal-charges-pocketing-millions-covid-relief-fraud-scheme)
- ($1.9M ) John Jhong (https://www.justice.gov/usao-nj/pr/sussex-county-man-charged-19-million-paycheck-protection-program-fraud-scheme)
- ($1.6M) Alicia Ayers, Andrea Ayers, Traci Proctor (https://www.justice.gov/usao-sdny/pr/three-defendants-charged-16-million-covid-19-fraud-scheme)
- ($1.6M) James Kyle Bell (https://www.justice.gov/usao-dc/pr/nevada-man-pleads-guilty-election-fundraising-scam-and-cheating-taxpayers-out-paycheck)
Source: Arnold & Porter, 2021 https://www.arnoldporter.com/en/general/cares-act-fraud-tracker *Disclaimer to reader – We believe that every person is entitled to due process and until convicted of any crime, anyone accused should be innocent until proven guilty. All contents in this article, including names and claims were confirmed in by research through the United States Department of Justice or the State the person is accused from.