The criminal complaints read like catalogs of luxury bling: a diamond-laden $52,000 Rolex, a gambling spree at the Bellagio, two Lamborghinis, a pair of Cadillac Escalades, a Rolls-Royce. All that and more, law enforcement officials say, was financed through schemes to defraud the federal government’s signature coronavirus relief program for small businesses.
The Justice Department has made at least 41 criminal complaints in federal court against nearly 60 people, who collectively took $62 million from the Paycheck Protection Program by using what law enforcement officials say were forged documents, stolen identities and false certifications, The New York Times reports.
They are just “the smallest, tiniest piece of the tip of the iceberg,” says Hannibal Ware, the inspector general of the Small Business Administration, which led the program. But with their ostentatious spending and clearly faked records, those examples have also been the easiest to spot.
The PPP poured $525 billion into the economy before coming to an end. More than 5 million businesses received loans, which could be forgiven if used for certain other expenses. Now, that hastily created and frequently chaotic program is entering its next messy stage, one that lenders and government officials expect to take years: the hunt to recapture illicitly obtained cash.
The challenge facing scores of state and federal agencies is enormous. The Small Business Administration’s fraud hotline, which received fewer than 800 calls last year, has already had 42,000 reports about coronavirus-linked graft. Read the full story.