louisiana ppp loan arrests

Each loan paid out was guaranteed using taxpayer money. We will also begin processing paper returns downloaded from the LDR website at, The federal Coronavirus Aid, Relief and Economic Security (CARES) Act provided Economic Impact Payments of $1,200 for qualifying individuals and $2,400 for qualifying married couples, with an additional $500 per dependent child. Unfortunately, the owners of Victoria Nails & Spa saw this program as their own personal piggy bank. If convicted, EVERY faces a maximum penalty of twenty (20) years, followed by a term of supervised release for up to three (3) years, a fine up to $250,000.00, or twice the gross gain to the defendant, or twice the gross loss to any victim, and a $100.00 mandatory special assessment fee, per count. BATON ROUGE, La. It soon became apparent that the Economic Injury Disaster Loan programs setup also made it particularly susceptible to 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. Click on a company's name to see additional loan details. The PPP was developed to ease the pain of COVID-19 economic restraints on working Americans. 61000. Congress reversed course when it passed a new law on December 27, which authorized more coronavirus loans. Act 12 of the 2020 First Extraordinary Session of the Louisiana Legislature provided for a one-time $250 rebate for eligible workers earning $50,000 per year or less, who spent at least 200 hours responding to or mitigating the COVID-19 crisis from March 22, 2020, through May 14, 2020. woman indicted for preparing 110 fraudulent PPP loans. A total of 73,824 loans were distributed to Louisiana leading to a reported 799,664 jobs being retained. More than 1,400 institutions had filed SARs related to PPP, and more than 900 institutions had filed SARs related to EIDL.. Not all the blame can be placed at the Small Business Administrations feet. If approved, the SBA pays the lender back using federal funds. 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. April 15, 2021. 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. Two people were approved for that amount twice, and one of those people got paid twice. We have a lot of qui tam cases that have been brought forward, Grossman told POGO, generally referring to False Claims Act complaints filed by private individuals. BATON ROUGE, La. 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. More due diligence on the part of lenders or the Small Business Administration could have prevented at least some instances of fraud. In certified submissions to the federal government, the familys ministry claimed a substantial operation with 486 employees, a monthly payroll of over $2.76 million, and revenue exceeding $51 million in 2019. The release states that, In exchange for a fee, My Buddy Loans took personal identifying information from victims and promised to file an application for an agricultural grant, which they said was available to those who owned a few acres of land. Instead, the defendants Clifton Pape, 45, and Sally Jung, 58, both of Cleveland, Texas, actually filed fraudulent EIDL applications with the SBA that contained the victims personal identification information.. With over 18 million Paycheck Protection Program loans and pandemic-related Economic Injury Disaster loans and advance grants approved over the last year, there is a sea of data on these programs. to give the federal government time to investigate and evaluate the complaint before it becomes public. Your Address, Corporation Income/Franchise Extension Request. The cash injection and potentially forgivable loans were . The loans have to be repaid with low interest. Civil enforcementwhere the evidentiary burden is lower than in criminal casesis another way of holding individuals and companies accountable. Not all those loans were necessarily fraudulently obtained. 2020 Louisiana Individual Income Tax returns and payments are due Monday, May 17, 2021. The Department of Justice (DOJ) says as of Aug. 8, more than 5.2 million forgivable loans have been approved, at a total of more than $525 billion. As far as the state of Louisiana is concerned, there is no requirement that a sole proprietor have a specific license at the state, said Ricks. Given the focus of the PPP to support employees during the COVID-19 pandemic, the Robinson Bradshaw firm wrote last May, it is easy to imagine how a dissatisfied employee observing imperfect business conduct in securing a PPP loan or applying loan proceeds could use that insider information to bring a qui tam action under the FCA.. All rights reserved. Yet if there is sufficient evidence, the government can still seize stolen money even in the absence of criminal charges. This is your state and county equivalent level look at how many have gotten a dose or doses of the COVID-19 vaccine. 2020 Louisiana Individual Income Tax returns and payments are due Monday, May 17, 2021. We are concerned only with actionable fraud. He added that, in selecting enforcement targets, we will follow the law, and we will not pursue companies that access CARES Act programs in good faith and in compliance with the rules.. The largest loan paid out was $20,833. First Home Bank approved the $8.4 million loan, among the less than 0.1% of Paycheck Protection Program loans this large or larger (the maximum is $10 million). | The forgivable loans were meant to cover payroll for employees and, later, other eligible expenses at a time when customers werent coming in. Louisiana Workforce Commission Suspected Fraud Form. An official website of the United States government. 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. Grossman told POGO, we expect a lot more civil enforcement.. The PPP loans are forgivable under certain conditions and the loan forgiveness is not taxable income for federal tax purposes. Investigators say those accused made false statements about things like how many people they employ, their average monthly revenue, and payroll figures. In remarks before the U.S. Chamber of Commerce, an influential business lobbying group, last June before the SBA released partial data identifying Paycheck Protection Program recipients of loans above $150,000, then-Principal Deputy Assistant Attorney General Ethan P. Davis said that with the administrations decision to release that information, some have predicted more qui tams as a result., Davis then said, Let me be clear. The program began issuing loans again in January 2021, and some businesses are eligible for a second loan. And there is a lot of gray area in the Paycheck Protection Program, partly because the Small Business Administrations rules for the program changed repeatedly and were unclear, and because Congress created loose criteria for loan eligibility and allowed applicants to self-certify their information. I urge anyone who believes he or she is a victim of this type of fraud to report it to the National Center for Disaster Fraud," said US Attorney Brandon Fremin. My feeling is that despite the fraud, the program helped far, far, far more of my people than it hurt, said Kennedy. She's accused of making up fake businesses to collect more than $20,000 through. And these cases are just the beginning. An indictment includes text and email messages involving creating tax records for some of the companies. At the request of WAFB, the Louisiana Board of Barber Examiners also searched their apprentice, student, barber, and shop records for those eight names and addresses, and came up empty as well. If youre going to steal money, finite resources from people who need them, then, by God, were going to prosecute you.. The Paycheck Protection Program saved millions of jobs. One St. Andrews Plaza - New York, NY 10007, Three Family Members Arrested for Misrepresenting Employee Payroll Figures to Receive COVID-19 Loan Funds for Chain of Family-Owned Nail Salons in New York Metropolitan Area and Other Businesses, James Margolin, Nicholas Biase 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. Shes accused of making up fake businesses to collect more than $20,000 through a PPP loan and another $500,000 in prepaid debit cards through unemployment claims. The Biden administration published a fact sheet on February 2 detailing new measures to prevent fraud in the program. Babysitter arrested after 5-year-old fatally shot by 6-year-old cousin. Click here to report information on Amazon warehouses. Byron Henderson of Loans Jobs Retained PPP Loan Recipient List By State Louisiana 217,332 TOTAL PPP LOANS $12.2B TOTAL LOAN AMOUNT $56,095 AVERAGE PPP LOAN 6 AVG COMPANY SIZE Louisiana has a total of 217,332 businesses that received Paycheck Protection Program (PPP) loans from the Small Business Administration. They allegedly exploited a program designed to provide vital funding for small businesses that are legitimately struggling in the midst of the pandemic. The PPP loans are forgivable under certain conditions and the loan forgiveness is not taxable income for federal tax purposes. We dont have the capacity to work everything that comes in, Grossman told POGO. Who in Louisiana got Paycheck Protection Program loans during the pandemic? Representative James Clyburn (D-SC), chair of the House Select Subcommittee on the Coronavirus Crisis, said in the March 25 hearing that the Trump administration ignored flags of potential fraud in the Economic Injury Disaster Loan program, and approved loans in batches with little to no vetting and abandoned a rule that required two SBA employees to approve each loan application., The Trump administration ignored flags of potential fraud, While a year has passed since the CARES Act became law and there are more checks now, government watchdogs say the Small Business Administrations oversight of the lending programs is still inadequate. They. Giving back to the community through a variety of venues & initiatives. Government and federal taxpayers writ large arent the only victims of fraud in the pandemic lending programs. The charges contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty. 6 AVG COMPANY SIZE. 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. NGUYEN, VICTORIA HO, and DAT HO are members of a family that owns a chain of over 15 nail salons called Victoria Nails & Spa and other companies (the Victoria Companies) in or around the New York metropolitan area, including the Bronx, Brooklyn, and Long Island. During the programs first round, the Small Business Administration issued 5.2 million loans between April and August 2020. In July, the agencys inspector general warned of potentially rampant fraud in the Economic Injury Disaster Loan program. The PPP loan forgiveness is not subject to Louisiana state income tax. A locked padlock $350K-$1M loan to BENOIT WELDING, INC. BENOIT WELDING, INC. $150K-$350K loan to THE DELAHOUSSAYE CO., INC. Nick Schwellenbach is a Senior Investigator at POGO. judy norton children; court ordered community service california DAVID RAINES COMMUNITY HEALTH CENTER, INC. Mr. Santemore's pleaded guilty on April 27, 2022, and was sentenced on July 25, 2022 but the terms of his sentence are under seal. Todays Internet search for PPP Loan Fraud Arrests will certainly produce an unwanted result one that includes the name of their company leading the headlines., IRS-CI Special Agent in Charge Jonathan D. Larsen said: In this difficult time when many Americans are struggling financially, it is repugnant that there are those who would fraudulently take advantage of relief efforts offered. 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. Nearly 11.5 million people filed applications, resulting in more than $792 billion worth of loans. & Meant to help small businesses keep workers on the payroll, the Paycheck Protection Program offers loans of up to $10 million that can be forgiven in full if recipients meet certain employee retention requirements. When the bank froze the funds, they froze as well, conducting Internet searches for topics related to PPP fraud. According to todays indictment, EVERY created a fictitious business called Natural Hair Afro, LLC, Houma, LA 70360 and used this fictitious business name on nearly all of the fraudulent PPP loan applications. Sen. J.D. This March, the Government Accountability Office added the Small Business Administrations emergency loan programs for small businesses to its biennial high-risk list of executive branch programs vulnerable to fraud, waste, abuse, and mismanagement, or that need transformation.. Pursuant to the CARES Act, the amount of PPP funds a business is eligible to receive is determined by the number of employees employed by the business and their average payroll costs. The Small Business Administrations Office of Inspector General found a significant gap in the agencys data on underserved markets, such as ethnicity, veteran status, and women-owned businesses. These cases further highlight the ways individuals appear to have taken advantage of lax oversight in the program. For example, in the city of Gonzales, there were 70 people claiming to own a barbershop who applied for loans. The Paycheck Protection Program (PPP) established by the CARES Act, provides small businesses with funding for payroll costs, mortgage interest, rent, and utilities. For instance, in a review for the Pandemic Response Accountability Committee, the nonprofit MITRE Corporation examined a sample of 500 records for Paycheck Protection Program loans above $150,000. 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