WASHINGTON — The Justice Department has charged 57 people with attempting to steal more than $175 million from the Paycheck Protection Program.
As CUToday.info has reported, the charges come as questions continue to rise related to how funds from the $600-billion program were disbursed and as other charges are brought for false applications and fraud.
Brian C. Rabbitt, the acting head of the Justice Department’s criminal division, said during a news conference the newest arrests involve individuals or small groups, acting on their own, who lied about having legitimate businesses or who claimed that they needed PPP money for things like paying workers or paying bills, but instead used it to buy splashy luxury items for themselves.”
In other cases, coordinated criminal rings stole large sums of money from the loan program, Rabbitt said. “We will be focusing on these types of cases going forward,” he added.
According to Rabbitt, the 57 cases charged by the criminal division ranged from loan requests for $30,000 to about $24 million, and that cases had been brought across the United States. Federal prosecutors had also brought separate fraud cases related to the coronavirus relief programs, he said, although he declined to say how many.
The New York Times reported the department and other law enforcement agencies this week arrested suspects accused of trying to steal $24 million in funds from the program as part of a criminal ring.
7 Charged in Criminal Ring
The Justice Department, meanwhile, unsealed charges against seven people accused of participating in a separate criminal ring that worked to steal and launder hundreds of thousands of dollars from the lending program; it arrested two men in Buffalo accused of trying to steal $7.6 million.
Included in the cases of alleged fraud is JPMorgan Chase, which distributed more than $29 billion in Paycheck Protection Program loans, the most by any lender. The bank has acknowledged in a memo to employees that some of its employees and customers had misused PPP and Economic Injury Disaster Loan (EIDL) funds.
“We are doing all we can to identify those instances and cooperate with law enforcement where appropriate,” the bank’s leaders said in the memo.
Senator Presses CEO
Senator Marco Rubio, Republican of Florida, asked Jamie Dimon, the chief executive of JPMorgan, for more information about the allegations that bank employees and customers had abused the Paycheck Protection Program and the Economic Injury Disaster Loan program, another component of the CARES Act.
In addition, the Small Business Administration reported its fraud line has received at least 42,00 reports over coronavirus-linked graft.