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Fraudsters Ran Away with Coronavirus Relief Funds

By Jacob Wolinsky. Originally published at ValueWalk.

Coronavirus Relief Funds PPP Loans another coronavirus relief package economic stimulus bill street lending program

Fraudsters Ran Away with Thousands in Coronavirus Relief Funds Meant For Small Businesses

The Trump administration set up  the Paycheck Protection Program with little oversight and even less organization. This handily opened the door for hundreds of fraudsters to exploit the PPP program meant for struggling mom-and-pop shops and their communities.


Q2 2020 hedge fund letters, conferences and more

At the beginning of August, the Justice Department had filed 36 PPP fraud cases, charging about 51 defendants. Now, that number is even higher.

This week’s headline roundup alone includes 4.24 million dollars of fraudulent PPP loans. And that’s just 5 articles…

Paycheck Protection Program fraud cases are on the rise. “Criminals have seen the PPP as fertile ground for scams, according to fraud experts. The federal government and banks granted hundreds of thousands of loans too quickly with limited vetting of applicants’ backgrounds, experts told CBS MoneyWatch… ‘The PPP application process itself created the opportunity for criminals’, said Richard Gordon, a Case Western Reserve University law professor.” (CBS, 8/25/20)

Fraudsters Cash Out On Coronavirus Relief Funds…

Fraudsters have a knack for seeking out exploitable weaknesses in financial systems. The SBA gave those looking to exploit the COVID-19 crisis for their own gain a gleaming opportunity.

Nevada man accused of using COVID-19 funds to buy $400K home. “A Henderson man is facing charges after he allegedly obtained around $500,000 and then laundered the funds through friends and family to buy a home. The man fraudulently obtained the money from the Paycheck Protection Program and the Economic Injury Disaster funds.” (KLAS Las Vegas, 8/26/20)

Florida neighbors sought $1.1M in coronavirus relief by pretending to be farmers: feds. “A pair of neighbors in Florida is accused of working together to commit an estimated $1.1 million in coronavirus relief fraud by falsely claiming they were farmers, officials announced.” (Yahoo Finance, 8/28/20)

$400,000 in coronavirus relief funds sent to NC man who lied on his application, feds say. “A 31-year-old man in North Carolina received more than $400,000 in loans doled out by the U.S. government to help businesses struggling during the coronavirus pandemic by lying on his paperwork, federal prosecutors say.” (Charlotte Observer, 8/26/20)

Virginia man pleads guilty to $1M virus fraud scheme. “A northern Virginia man has pleaded guilty to a $1.4 million fraud scheme to obtain federal funds meant for businesses struggling under the coronavirus pandemic.” (Virginia WUSA9, 8/26/20)

Minnesota Man Charged with COVID-19 PPP Loan Fraud. “Kyle Brenizer, 32, of St. Paul has been charged with fraud as he obtained $841,000 in Coronavirus Relief Loans for a business that has been nonoperational for the last two years. According to the U.S. Attorney’s Office of Minnesota, Brenizer and his company, True-Cut Construction LLC, were ordered a cease and desist order from doing any business in August of 2018.” (Minnesota AM 1390 Radio, 8/24/20)

Struggling Businesses Close Up…

And among them, Black and minority-owned businesses, especially those in underserved communities, shutter at an even higher rate.

Survey: One-fifth of small businesses will close if conditions don’t improve. “One in every five small businesses say they will not be able to stay open if economic conditions don’t improve in the next six months, and a similar number say they can only last a year.” [The Hill, 8/25/20]

Over 120 El Paso businesses close for good; others fight for survival as aid dries up. “More than 120 businesses in El Paso closed for good from March 1 to July 10, according to new data from Yelp, the business listing and review site. The latest to close: Sorrento. The family that owns the Italian eatery recently announced in a social media post that it is closing permanently after more than 60 years in operation.” (El Paso Inc., 8/24/20)

Philly’s Black-owned business crisis: Walloped by the pandemic and closing at faster rates. “The coronavirus pandemic has devastated small businesses across the country, but no group has been hit harder than Black-owned businesses. Nationally, Black businesses have been more likely to be shuttered and less likely to receive the federal aid they requested compared to other groups.” (WHYY Philadelphiia, 8/24/20)

Small businesses say mail slowdown hurting at worst time. “’We just reorganized and survived this pandemic and managed to set a path for the next six months, and now our main form of ability to do business is also being impacted,’ said Kristen Hess, owner of Let’s Play Books in Emmaus, Lehigh County.” (WFMZ-TV, 8/25/20)


Accountable.US is a nonpartisan watchdog group that exposes corruption across all levels of government.

© 2020 Accountable.US

The post Fraudsters Ran Away with Coronavirus Relief Funds appeared first on ValueWalk.

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