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(COVID-19 pandemic) Authorities in New York have accused a man from Texas of applying fraudulently for more than $30 million in PPP loans. He’s been sentenced to prison.
What’s the story?
(COVID-19 pandemic) Following the arrest of four additional people who were participating in the plan, the man, who is from Irving and is 33 years old, was given a sentence of 42 months in prison, according to a news release from the United States Attorney for the Southern District of New York. According to Attorney Damian Williams, the five individuals who were involved in the conspiracy “illegally seized cash that was designed to financially support failing firms.” Because they stole much-needed relief that was intended to be given to companies that were truly deserving of it, each and every one of the defendants, in this case, is now looking at the possibility of facing considerable prison time.
Scam alert! COVID-19
Throughout the first year of the COVID-19 epidemic, the gang, with the exception of one Texas resident, filed fake documentation with the Small Business Administration as part of the Paycheck Protection Program (PPP), according to officials. Officials said the scam involves collaboration with individuals linked with legitimate enterprises and the submission of fraudulent or deceptive PPP loan applications. According to investigators, one application submitted in June 2020 said that a company in need of funding employed more than 100 workers. In reality, there were just four employees at the company.
$15 million in losses in COVID
In total, the government suffered more than $15 million in losses as a result of COVID-19, including around $4 million distributed based on fraudulent applications for New York corporations, according to officials.
According to court documents, the Irving man pleaded guilty to one count of wire fraud in April 2022 after being accused in 2021. On top of his prison sentence, he has been required to pay $9.3 million back to the government, officials added.
Prison sentences for four co-conspirators
A prison sentence ranging from 18 to 90 months was handed down to each of the four co-conspirators, and they were also ordered to make restitution to the government in the amount of approximately $20 million. According to the Department of Justice, hundreds of individuals from different parts of the country have been charged in relation to fraudulent pandemic schemes.
According to the Associated Press, which cited a report by the Office of the Inspector General of the SBA published in May 2022, it is possible that more than $80 billion in emergency loans were obtained through fraudulent means during the epidemic.
The greatest fraud of a generation
Matthew Schneider, a former United States Attorney from Michigan who is now a partner at Honigman LLP, stated that “nothing even remotely similar has ever happened before.” “This is the most elaborate hoax perpetrated in a whole generation.”
During an exclusive interview with Lester Holt from “NBC Nightly News,” Inspector General of the Justice Department Michael Horowitz, who is in charge of overseeing how much money is spent on COVID-19 relief, stated that the COVID-19 relief programs were designed in a way that made them easy targets for theft. “The Little Trade Organization, in sending that cash-out, fundamentally said to individuals, ‘Apply, and sign, and tell us that you’re truly entitled to the money,’” said Horowitz, who chairs the Widespread Reaction Responsibility Committee.
The criminal strategy changed, depending on the program. The epic cheat of COVID-19 unemployment alleviation has been carried out by person hoodlums or sorted out wrongdoing bunches utilizing stolen personalities to claim jobless benefits from state workforce organizations disbursing government reserves. Each character may be worth up to $30,000 in benefits, agreeing to Horowitz.
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