DOJ Announces Several Indictments Involving CARES Act Fraud

The Federal Docket

July 7, 2020

Throughout June, the Department of Justice announced a series of prosecutions initiated against individuals and business accused of “COVID-Relief Fraud,” the DOJ’s term for fraud charges involving the recently enacted Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Several of these charges involved the Paycheck Protection Program (PPP) loans issued by the SBA. In an Illinois case, the federal government is charging a business owner with bank fraud and making false statements to a financial institution, alleging that he applied for a $400,000 loan that “significantly overstated” his business’s actual expenses and included allegedly false IRS documents.

The DOJ announced similar charges in Texas, charging a business owner who applied for $3 million in PPP loans with wire fraud, false statements, and money laundering. The complain alleges that the man lied about having 120 employees earning wages where he actually did not actually employ anyone and used the funds for personal expenses.

A man in Massachussets was charged with filing a fraudulent loan application and wire fraud for $13 million in PPP loans based on alleged misrepresentations regarding the number of employees and payroll expenses and false certifications regarding his employees’ primary residence within the U.S. In Arkansas, a project manager employed by a major retailer was charged with wire fraud, bank fraud, and making false statements to a bank and the SBA in connection with his application seeking $8 million in PPP loans. The prosecutors allege he misrepresented his payroll expenses with false documents.

Most recently, a doctor in Seattle was charged with wire fraud and bank fraud after he sought $3 million in PPP loans. Federal prosecutors are accusing the man of submitting several applications for loans on behalf of businesses “with no actual operations” or misrepresenting their eligibility, including by the number of employees and payroll applications. The government also alleges that the man concealed his criminal history.

Tom Church - Tom is a trial and appellate lawyer focusing on criminal defense and civil trials. Tom is the author of "The Federal Docket" and is a contributor to Mercer Law Review's Annual Survey in the areas of federal sentencing guidelines and criminal law. Tom graduated with honors from the University of Georgia Law School where he served as a research assistant to the faculty in the areas of constitutional law and civil rights litigation. Read Tom's reviews on AVVO. Follow Tom on Linkedin.

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