Shown is a portion of a Small Business Administration Paycheck Protection Program Borrower Application Form, Tuesday, April 21, 2020 in Washington. The Paycheck Protection was supposed to be a lifeline for small businesses, helping them stay afloat and keep their employees on the payroll during the coronavirus pandemic. But guidelines from the Small Business Administration say that businesses are ineligible if someone who owns at least 20 percent of the company is incarcerated, under indictment, on probation or parole or had been convicted of a felony within the last five years. Ineligible would-be applicants and advocates say the restrictions are a slap in the face for those who have served their time, especially from an administration that has trumpeted second chances. (AP Photo/Wayne Partlow)

57 People Face Federal Charges Of Defrauding Coronavirus Relief Program

Prosecutors say those charged attempted to steal more than $175 million from the Paycheck Protection Program, which is meant to provide relief to small businesses impacted by the pandemic.

The Justice Department’s Criminal Division says it has charged 57 people to date over allegedly defrauding a federal program meant to provide relief to small businesses during the coronavirus pandemic.

The Criminal Division’s acting assistant attorney general, Brian Rabbitt, told reporters that those charged attempted to steal more than $175 million. They actually obtained more than $70 million, he said, and the Justice Department has been to recover or freeze over $30 million.

The Paycheck Protection Program, which was designed to help businesses keep workers on their payroll, was approved by Congress in March as the coronavirus crisis was emerging. Before it closed to new applications last month, according to Rabbitt, it doled out some $525 billion in forgivable loans.

“We allege that many of these defendants took the relief money offered by the PPP and spent it on things having absolutely nothing to do with relief,” Rabbitt said. For example: A Miami man who allegedly obtained almost $4 million in funds and used some of this money to buy a Lamborghini.

Rabbitt said the cases varied in size and scope. Some were individuals who allegedly lied about details of their business – or its existence — and then used the funds for “illegitimate purposes,” such as to buy luxury items. Others were involved in coordinated crime rings. The money the alleged fraudsters sought ranged from $30,000 to $24 million.

He stressed that the money taken fraudulently from the program took available funds away from businesses that needed them.

These are not the only federal cases aimed at tamping down PPP fraud — U.S. attorney’s offices around the country are bringing similar cases.


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