The Justice Department has charged seven people with fraudulently applying for COVID relief funds from the government totaling millions of dollars. They stole the funds to purchase a Lamborghini, a Porsche, other luxury items, and property. Federal authorities say the suspects lived in both Texas and Illinois. Charges also include wire fraud, conspiracy to commit wire fraud, and money laundering.
The Payroll Protection Program was started by the government as a $660 billion loan program due to the coronavirus. This was set up to assist mostly small businesses. It is alleged that the defendants had already received $16 million of the $30 million they were requesting.
Named in the indictment are Amir Aqeel, Siddig Azeemuddin, Pardeep Basra, Rifat Bajwa, Mayer Misak, Mauricio Navia, and Richard Reuth. According to the Justice Department, these seven individuals submitted dozens of loan applications. The applications included phony payroll expenses, tax forms, bank records, and other documents according to NBC News.
Federal agents served 45 warrants to confiscate items purchased with the money
One of the indicted men owned a check-cashing business. So this was part of the way the defendants initially got away with the fraud. Phony paychecks were cashed by nonexistent employees. Federal agents served 45 warrants to confiscate items purchased with the money. This included a 2013 Lamborghini, an undescribed Porsche, as well as property in a post section of Houston, Texas.
By July 2020 there were over 1,000 reports of business loan fraud in connection with the federal loan program. A preliminary analysis concludes that tens of thousands of loans were connected to fraud, waste, or abuse. So the problem involves a lack of oversight to be able to determine how the loans are being used. Though there looks to be a lot of fraud connected with the Paycheck Protection Program the Inspector General says it will take years to look at all of the allegations.
Part of the problem is the speed to get the funds out to those in need
Suspicious activity reports filed by banks and loan companies helped the FBI combat the COVID-19 fraud. With that information, the FBI works with the Department of Justice to address both fraudulent PPP loans and Economic Injury Disaster Loan Emergency Advances. Part of the problem is because of the speed to get the funds out to those in need.
“The vast sums of money being injected into the economy, the haste with which organizations must deploy those funds and pandemic-related financial pressures on employees and contractors have created a perfect storm of conditions that may lead to fraud, waste, and abuse,” former Inspector General of the New York Department of Labor told Forbes.
Currently, there are hundreds of FBI agents, IRS agents, and many more from the SBA Inspector General’s office working on PPP fraud cases. As they say, “Execution isn’t everything, but it’s a lot.”