Virginia Man Pleads Guilty In PPP Fraud Case As The FBI Continues To Hunt Loan Scammers | #coronavirus | #scams | #covid19


Since early May, the federal government has been arresting people accused of fleecing the Paycheck Protection Program, a $660 billion federal initiative that provided small business owners with loans to pay their employees and stay on-top of their bills during the coronavirus pandemic, but which some people have abused to buy cars, gamble at casinos and line their pockets. 


A Virginia man, Tarik Jaafar, pleaded guilty Tuesday to creating four shell companies and applying for $6.6 million in PPP loans, ostensibly to pay his employee’s salaries. Jaafar and his wife were awarded $1.4 million in PPP loans, most of which was recovered after the couple was arrested at John F. Kennedy International Airport on June 20 while trying to flee to Poland.

Nine people were charged with a $24 million PPP scheme on August 6 that spanned from South Florida to Ohio. The defendants and their accomplices filed at least 90 fake loan applications among them and were awarded $17.4 million in PPP loans, with each accomplice being promised a kickback once their loan was awarded.

A Florida man, David Hines, was arrested July 28 and charged with fraudulently obtaining $3.4 million in PPP loans—he used part of the money to buy a 2020 Lamborghini Huracan worth $318,000.

Andrew Marnell was arrested July 16 after allegedly receiving $9 million in fraudulent loans—according to the U.S. Attorney the L.A. resident spent hundreds of thousands of dollars gambling at the Bellagio Hotel and Casino in Las Vegas and making risky trades on the stock market.

In Texas, a man named Samuel Yates was charged on May 19 with filling two PPP loan applications totaling over $5 million after claiming that he had over 400 employees with an average monthly payroll of about $2 million. Yates, who had zero employees, submitted a list of names with the applications which he got using a free random name generator he found online.

The first arrest and charge in a PPP fraud case was on May 10, and involved two New England businessmen, David A. Staveley and David Butziger, who claimed to have dozens of employees at four different businesses, when there were no employees working at any of their businesses. The two attempted to get a $500,000 PPP loan, but were caught before the loan was paid out.

Key Background

As of August 13 there have been 36 cases of fraud involving PPP loans. The program, part of the CARES Act that was signed into law in March, set aside $349 billion in potentially forgivable loans to help small businesses keep their employees on the payroll, and Congress added $310 billion in additional funding in April. While borrowers have to apply for loan forgiveness, many are biding their time to see if Congress will remove the forgiveness application requirement for smaller loans.

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