Feds Charge a Dozen Floridians with COVID Fraud

Three more Florida residents are joining more than a dozen others in a sweeping prosecution of those charged with defrauding the COVID relief programs passed by the federal government during the quarantine. The alleged fraudsters have been charged with wire fraud, conspiracy to commit wire fraud, money laundering, and conspiracy to commit money laundering. They are being charged by the federal government.

Prosecutors accuse the defendants of taking advantage of the Payroll Protection Program that offered loans to businesses to protect their payrolls during the shutdown. The defendants are accused of submitting fraudulent Payroll Protection Program loan applications and misrepresenting the number of employees so that they could make their businesses eligible for loans disbursed by the programs. According to authorities, lenders disbursed more than $14.5 million to conspirators who would allegedly withdraw the money and kick up some of the proceeds to the ringleaders.

Understanding pandemic relief fraud in Florida

 The CARES Act (Coronavirus Aid, Relief, and Economic Security Act) was intended to provide economic relief to individuals and businesses that were shut down during the coronavirus pandemic in March of 2020. One of the main components of the CARES Act was the Payroll Protection Program. Businesses were allowed to file applications with the federal government to give to employees while America was under quarantine. The federal government earmarked nearly $350 billion dollars to bail out American businesses. Despite the best intentions of the government, several individuals submitted fraudulent applications and the fund ran out of money in a matter of minutes. Since then, authorities have been backtracking to file charges against those who defrauded the program.

What constitutes CARES Act fraud? 

• Loan stacking – Receiving multiple loans from different lenders constitutes loan stacking.

• PPP loan application fraud – The PPP program specified certain criteria for receiving a loan through the program. Those who misrepresented their businesses to the PPP loan program can face fraud charges. In many cases, businesses misrepresented the number of employees they had in order to secure loans from the program. They also misclassified employees as independent contractors to fall below the 500-employee limit set by the program.

• Fraudulent loan certification – Loan applicants were required to certify facts concerning their business. These included that the funds would be used to retain workers during the pandemic.

• Using PPP funds for ineligible purposes – Companies who applied for loans were required to use the money for one of four purposes. These included (1) to cover payroll costs, (2) to pay interest on mortgage obligations, (3) to pay rent, and (4) to pay for utilities. Any other use of the money was prohibited.

• Fraudulent loan forgiveness certification – Many companies were eligible for loan forgiveness under the program. But they must certify specific facts and must have used the funds for the reasons outlined by the federal government.

Talk to a Tallahassee Fraud Attorney Today 

The Tallahassee white collar crime attorneys at the office of Luke Newman, P.A. represent the interests of those charged with CARES Act fraud. Call our office today to schedule an appointment, and we can begin discussing your case right away.

Source:

local10.com/news/local/2023/11/09/feds-charge-3-more-in-massive-south-florida-covid-loan-fraud-scheme/