U.S. officials charge 14 people in $53 million pandemic relief fraud scheme
NORTH TEXAS (CBSNewsTexas.com) - Federal charges have been filed against 14 people for taking advantage of pandemic relief in a $53 million fraud scheme, U.S. Attorney for the Northern District of Texas Leigha Simonton announced.
The CFO, controllers and corporate officers were arrested Tuesday and Wednesday in Texas, California and Oklahoma. According to Simonton, they were operating recycling companies.
A series of indictments accuse the defendants of submitting at least 29 Paycheck Protection Program (PPP) loan applications that inflated payroll expenses, as well as reporting false business income through doctored bank statements. The documents also accuse them of routing PPP loan funds through a series of bank accounts to create a false paper trail of payroll expenses.
The Department of Justice continued its allegations against at least two defendants who, officials say, submitted false applications to financial institutions in relation to their so-called recycling companies to get millions of dollars in business loan proceeds.
"Defrauding the government is an affront to American taxpayers. Defrauding the government during a pandemic – at a time when millions of hardworking entrepreneurs struggled to make payroll and rent – is pouring salt in a wound," said Simonton in an emailed statement. "These defendants allegedly conspired to steal tens of millions of dollars from the Paycheck Protection Program – funds which could have helped legitimate businesses pay their bills and keep their employees afloat. We are thankful to the officers and agents who meticulously investigated this case, especially the data scientists at the Pandemic Analytics Center of Excellence, whose sophisticated analysis ensures that those who abused the PPP will be brought to justice."
If convicted, officials say the defendants are facing up to 30 years in federal prison for each count of conspiracy to commit bank fraud, bank fraud and aiding and abetting, bank fraud and making a false statement to the Federal Deposit Insurance Corporation. In addition, they could face 20 years for wire fraud and 10 years for conspiracy to commit money laundering.
