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DOJ Has Charged 57 in PPP Loan Scams

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The Department of Justice’s Criminal Division has charged 57 defendants who allegedly committed fraud to obtain money from the Paycheck Protection Program.

Acting Assistant Attorney General Brian Rabbitt announced the actions Thursday at a news conference in Washington.

Rabbitt stated that the defendants have attempted to steal over $175 million from the PPP, causing actual losses to the federal government of over $70 million.

When the PPP closed to new applications on Aug. 8, more than 5.2 million loans had been approved, for a total in excess of $525 billion, Rabbitt reported.

The DOJ, working alongside other agencies, has been able to recover or freeze over $30 million, he said. “We expect to add to that total in the future as we seize additional funds and liquidate assets purchased with PPP funds.”

The cases, he said, “are diverse in size and scope, involving fraud ranging from loan requests for just $30,000 to approximately $24 million.”

National Football League wide receiver Joshua Bellamy was arrested and charged for his alleged participation in the $24 million loan request.

The PPP charges have been brought “in no fewer than 19 federal judicial districts,” Rabbitt stated, adding that “these are not simple or easy cases to investigate and charge.”

As white-collar matters, the investigations “often involve obtaining and then piecing together often-complex financial, payroll and tax records for individuals and companies, and sifting through other evidence,” Rabbitt said.

The PPP schemes, he continued, fall into two categories:

  • Individuals or small groups who lied about having legitimate businesses, or who claimed they needed PPP money for things like paying their workers, but instead used it to buy splashy luxury items for themselves.
  • Coordinated criminal rings that have engaged in systematic, organized conduct to loot the PPP.

“The involvement of these rings is unsurprising, but it is particularly troubling, and we will be focusing on these types of cases going forward,” Rabbitt said.

One case involved two New York brothers who were charged Thursday in a criminal complaint for their alleged participation in a scheme to file at least eight fraudulent loan applications seeking nearly $7 million in forgivable PPP loans.

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