A man from Texas has been accused of trying to steal more than $5 million by filling fake applications pretending to be the employer of hundreds of "workers."
The funds aim to assist small businesses that have been affected by the coronavirus pandemic.
The suspect, Samuel Yates, 32 years old, planned to acquire millions in aid relief via loans distributed by the Small Business Administration (SBA). The finances are given out under the Coronavirus Aid, Relief, and Economic Security (CARES) Act that was implemented to support small businesses.
Fraudulent claims amid the pandemic
Fox News reported that Yates was looking to receive the loans from two separate banks where he claimed to have more than 400 paid employees. The claim was reported as a fraud by the Department of Justice in a press release.
"This defendant allegedly sought to steal millions of dollars in loans intended to aid legitimate small businesses grappling with the economic effects of COVID-19," said Assistant Attorney General Brian A. Benczkowski of Criminal Division of the DOJ. "The department and our law enforcement partners will use all the tools at our disposal to investigate and prosecute frauds against the Paycheck Protection Program."
Attorney Joseph D. Brown of the Eastern District of Texas said that there will always be fraudsters trying to take advantage whenever there is a large amount of money benign given away. He also said, "We encourage lenders to be very careful and to report suspicious applications. It is a priority of the Department of Justice to deter and prosecute this type of fraud."
Also Read: Impacts of Covid-19 on Businesses
Yates' second application claimed he employed over 100 individuals, all of which receive a salary, and was able to get more than $500,000 in relief funds. Each application that he filed included a list of "fake employees" that he acquired from a publicly available random name generator and forged tax documents to support his claims.
Supporting those in need
The CARES Act was initially enacted on March 29 to aid millions of citizens after the catastrophic effects of the coronavirus on businesses and employees alike. The authorization of nearly $349 billion in forgivable loans is one of the Act's methods of support to struggling businesses
An additional $300 billion in PPP funding was authorized by Congress in April to supplement the increasing need of the nation further, as stated by the DOJ.
Yates has been charged with several violations of fraud and filing false claims to financial institutions as well as the SBA. No information has been given if the suspect has a lawyer that will be speaking on his behalf.
The SBA guarantees the loans using the Paycheck Protection Program (PPP) as the CARES Act was passed in late March by lawmakers to assist struggling businesses to stay afloat amid the economic impacts of the COVID-19 pandemic.
The DOJ expressed its gratitude with the investigation conducted by the SBA Office of Inspector General as well as the US Postal Inspection Service to take this matter into legal matters immediately.
The department also asks anyone with information regarding any fraud to report it by calling their hotline or visiting their website here.
Related Article: COVID-19 Surcharge: What Is It and Why Are Businesses Adding It?