Fraudulent PPP loans used to buy real estate, luxury cars and jewelry

  • The Department of Justice has accused many business owners of fraud on their PPP and EIDL loans.
  • The convictions relate to purchases of sports cars, million-dollar homes, jewelry and designer handbags.
  • The department has prosecuted more than 235 defendants in more than 162 criminal fraud cases.

While the Paycheck Protection Program was considered a successful rescue program by many, it was riddled with fraud as many sought to take advantage of the low barrier application process, federal investigators found.

As part of the $3 trillion CARES Act, signed into law in March 2020, the Small Business Administration oversaw two federal rescue programs intended to help 7.5 million Small American businesses are at risk of permanent closure in the first year of the COVID-19 pandemic.

the Paycheck Protection Program has made forgivable loans of up to $10 million available to business owners to cover payroll and certain business expenses. The Small Business Administration has awarded nearly $800 billion in PPP loans to 11.47 million businesses.

A similar low interest program Economic Disaster Loans up to $500,000 available to business owners to pay for operating expenses. The SBA has awarded nearly 390 billion dollars of these loans to 4 million businesses.

Since then, the Justice Department has accused several business owners of fraudulently obtaining government loans, alleging they never used the funds for eligible purposes, such as employee payroll or business expenses. . In two notable examples, a man pleaded guilty to buying a Lamborghini and the Justice Department indicted another man on charges that he bought an alpaca farm with PPP money.

As of October, the Justice Department had prosecuted more than 235 defendants in more than 162 pandemic-related criminal fraud cases, according to a recent report speak United States House Special Subcommittee on the Coronavirus Crisis.

Here are the most notable Justice Department charges.

Comments are closed.