In an attempt to help alleviate the financial hardships that the COVID-19 pandemic brought to many businesses, the federal government established multiple programs that provided financial assistance, including the Small Business Administration’s (SBA) Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) program. Unfortunately, while these programs did help prevent hundreds of thousands of companies from going out of business, they also created multiple opportunities for fraudulent claims. The U.S. Department of Justice is aggressively investigating and prosecuting these cases, as two Tennessee residents recently discovered.
U.S. Attorney’s Office Eastern District of Tennessee Announcements
In August, the DOJ’s Eastern District of Tennessee announced two separate cases of fraud connected to pandemic relief programs.
In one case, a Knoxville, TN woman pled guilty to one count of executing a wire fraud scheme. According to the announcement by the DOJ, the woman had applied for 10 loans, totaling $547,286 through the PPP and EIDL programs. These applications were submitted under companies that either did not exist or did not qualify for the loans. The woman submitted false records regarding the revenue the companies generated, the amount of employees she had, and the amount of payroll expenses the company had. She is scheduled to be sentenced in January 2022 and faces a sentence of up to 20 years in prison, supervised release of up to three years, and a fine of up to $250,000. The woman has agreed to pay restitution of $471,621.
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