While the Paycheck Protection Program (PPP) has helped millions of small business owners to keep paying their employees during the economic crisis sparked by COVID-19, many others quickly found ways to exploit the system and obtain PPP loans fraudulently. This has eventually led to a surge in arrests and federal charges of PPP fraud. Let's continue our exploration into some of the most noteworthy PPP fraud stories we've heard so far.
Pastor Buys a Tesla with Funds from Fraudulent PPP Loans
In April 2021, a Maryland pastor was arrested and charged with wire fraud after allegedly obtaining a fraudulent PPP loan for a company that had gone under eight years prior. He allegedly faked his payroll forms and instead used the $1.5 million he received for personal purposes, including the purchase of a $60,000 Tesla Model 3. The pastor also allegedly applied for additional loans of $200,000 and $1.8 million for his church and a bank.
Upon the arrest, authorities seized the Tesla along with $2.2 million from the pastor's accounts. If convicted, he could be sentenced to up to 20 years in prison plus three years of supervised release.
California Businessman Uses Fraudulent $5 Million PPP Loan on Exotic Cars
With millions in PPP loan money being obtained by allegedly fraudulent means, it's particularly noteworthy when an extraordinarily large amount goes to one person. As the Washington Post reports, one California businessman allegedly received $5 million in bogus PPP loans for “sham businesses,” then used the money on himself. Among his purchases were a Bentley, a 2011 Ferrari 458 Italia, and a 2018 Lamborghini Aventador S, collectively valued at more than $1 million.
Authorities say the defendant requested the money to support four businesses he said he owned and operated. In conjunction with the scam, he also allegedly falsified information on his tax returns and even used someone else's name and social security number on the application. The feds have charged him with wire fraud, identity theft, and money laundering. They've also seized his cars and $2 million.
Thanks in part to the many instances of PPP loan fraud, the federal government is actively seeking out those who may have obtained or used their PPP loans fraudulently. If you're accused of fraud in connection with a PPP loan, the Sigal Law Group can provide skilled representation to make sure your rights are protected. Call us today at (818) 325-0570 for a free consultation.