2 Arrested in New England for PPP Fraud

By: First Union

resources

2 Arrested in New England for PPP Fraud

This is the first fraud case in the country concerning money loaned through the PPP. Two New England business owners attempted to get hundreds of thousands to form the program under pretenses. The chief of the U.S. Justice Department's Criminal Division is skeptical that this will be the only such case when all is said and done.

Both men were from Rhode Island; the loans totaled $544,000. Their false claims included saying that they had dozens of employees working at four different places. The reality was no employees were working for any of the noted businesses.

The PPP was developed in March during the start of the crisis to help small businesses stay open even when they had to shutter for lockdown. Thus far, the program has given out over 660 billion in funds. Over four million businesses across the country have received these loans. Businesses can qualify for up to ten million, but they have fewer than 500 employees. Loans can be forgiven as long as a certain percentage of the money is spent on payroll-related expenses.

The Rhode Island arrests, many suspect, will not be the first. The number of leads that investigators are currently looking into around the US is in the double digits already. In preparation for what may be to come regarding such fraud cases, authorities are studying past cases, following Katrina and the Great Recession for example.

Prosecutors intend to go after every lead and pursue justice to the full extent in these instances as they have the full force of all US attorneys' offices across the nation.

The men are being charged with conspiracy to commit bank fraud. Court documents show that the two applied for loans at the start of the pandemic for businesses that were not then in operation and consequently had no employees. And in one circumstance, one of the men sought a loan for a restaurant that he did not own.

The pair had discussed through a series of emails how they would create and generate fraudulent documents to support their loan applications. The fact that these two men would falsify documents, apply for loans for businesses that weren't even theirs, and claim to have numerous employees is unconscionable, according to the Department of Justice. Tens of millions have lost their jobs. So many business owners are legitimately struggling right now just to stay afloat and here these men have stolen over five hundred thousand from the program—such that could have gone to companies that needed the funds.

First Union Lending is here to help! We want to see our clients come through this; we want to see you continue to thrive and grow. The loan programs we offer are fast and flexible. Each is custom-tailored to meet your business's needs. No offer the shelf approach with us. If you need cash to weather this storm, then we can certainly assist. Call today!

Becky: Hi! Let's find the best loan option for you

Google 4.8 star rating
Trustpilot 4.6 star rating

First Union Lending LLC is a dually licensed Lender/Broker with its main offices located at 4900 Millenia Blvd First Floor Orlando, FL 32839. First Union Lending LLC and its ads are meant for continental United States, including Alaska and Hawaii small business owners. Business Loans offered by First Union Lending LLC have varying rates and terms that can range from 30 - 120 payments and all rates and terms are based on eligibility of the business and its owners. The actual terms are based on credit, business history, industry, amount and terms. As an example, a $5,000 loan paid over 5 years at 8% would have a total repayment of $6,082.92 over the life of the loan. We use the latest encryption to protect sensitive information transmitted online, as well as run our own secure server network to ensure your information is protected offline as well. California loans made pursuant to the California Financing Law, Division 9 (commencing with Section 22000) of the Finance Code. All such loans made through VBJ Consulting, LLC, a licensed finance lender/broker, California Financing Law License No. CFL#60DBO78163

Copyright © First Union Lending, LLC. 2023