- The Justice Department has charged many business owners with fraud over their PPP and EIDL loans.
- Convictions relate to sports-car purchases, million-dollar homes, jewelry, and designer handbags.
- The department has prosecuted more than 235 defendants in more than 162 criminal fraud cases.
While the Paycheck Protection Program was considered a successful rescue program by many, it was rife with fraud as many sought to take advantage of the low-barrier application process, federal investigators have found.
As part of the $3 trillion CARES Act, signed into law in March 2020, the Small Business Administration oversaw two federal rescue programs intended to help the 7.5 million US small businesses at risk of closing permanently in the first year of the COVID-19 pandemic.
The Paycheck Protection Program made forgivable loans of up to $10 million available for business owners to cover payroll and certain business expenses. The Small Business Administration awarded nearly $800 billion in PPP loans to 11.47 million businesses.
A similar low-interest program made Economic Injury Disaster Loans of up to $500,000 available to business owners to pay operational expenses. The SBA awarded nearly $390 billion in those loans to 4 million businesses.
Since then, the Justice Department has charged several business owners over accusations that they fraudulently obtained government loans, alleging they never used the funds for eligible purposes, such as employee payrolls or business expenses. In two notable examples, one man pleaded guilty to purchasing a Lamborghini and the Justice Department charged another man over accusations that he bought an alpaca farm with PPP money.
As of October, the Justice Department had prosecuted more than 235 defendants in more than 162 pandemic-related criminal fraud cases, according to a recent report by the US House Select Subcommittee on the Coronavirus Crisis.
Here are the most notable charges from the Justice Department.
