The Eastern District of Texas U.S. Attorney’s Office has charged a Texas man by federal criminal complaint with bank fraud, wire fraud, false statements to financial institution and false statements to the Small Business Administration (SBA). According to the complaint, the man allegedly submitted bank loan applications to fraudulently attempt to receive more than $5 million in forgivable loans guaranteed by the SBA under the CARES Act. According to the complaint, the individual used a random internet name generator, copied the names obtained from the internet and claimed them as his employees. The man allegedly filed bank loan applications for loans guaranteed by the SBA for COVID-19 relief through the Paycheck Protection Program (PPP) with two different banks claiming he had over 400 employees earning wages when he never had any employees working for his purported business.
The Paycheck Protection Program (PPP) is part of the CARES Act, which was enacted in March of this year. The PPP allows qualified small businesses to receive loans at a low interest rate for two years. PPP loan proceeds must be used to pay business payroll costs, interest on mortgages, rent and utilities.
COVID-19 and CARES Act related fraud charges are expected to be imminently forthcoming as the DOJ has prioritized the prosecution and investigation of such fraud. If you need assistance with a fraud case, please contact our office.