PPP Fraud: 5 Charged In Scamming US Government For $1 Million Meant For Small Businesses

The U.S. Justice Department on Thursday announced it filed bank fraud and money laundering charges against five people accused of falsifying federal pandemic relief applications.

Three men from Milwaukee and two men from Chicago were charged in a Wisconsin federal court for their role in seeking more than $1.1 million through the Paycheck Protection Program (PPP).

Part of the CARES Act — the federal stimulus package passed early this year — the PPP offers $659 billion in low-interest loans to provide eight weeks of pay for small-business employees. The federal indictment, unsealed Thursday, accuses the five men of filing several fraudulent PPP loan applications for businesses that had no employees or operations.

“In the applications, the defendants allegedly misrepresented the number of employees and payroll expenses," the Justice Department said in a statement. “To support the fraudulent applications, the indictment alleges that the defendants submitted fake tax documents.”

There have been other such cases since PPP was passed in March. A businessman from Texas and another in Florida used PPP to finance luxury vehicles, including a $200,000 Lamborghini Urus, among other expenses.

A staff report from a U.S. House select committee reviewing PPP found billions of dollars in federal relief funds were abused, including some tens of thousands of instances where borrowers received more than one loan in violation of the language of the bill that created the program.

Rep. James Clyburn, D-S.C., who serves as chairman of the subcommittee, asked in September for a federal review of management over the PPP, citing a “lack of oversight and accountability.”