DOJ IDs 500 Suspects in COVID-19 Loan Frauds

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Federal law enforcement officials have identified nearly 500 people suspected of committing coronavirus-related loan fraud and have opened “several hundred” investigations, the Justice Department said Thursday, Politico reports. It’s unclear how many people bilked the Paycheck Protection Program, which offers government-backed, forgivable loans to small businesses. Acting Assistant Attorney General Brian Rabbitt said, “we do believe it’s significant.” New details on potentially fraudulent applications for the loan program show how the rush of aid during the early pandemic emergency has led to what prosecutors fear could be widespread abuse. DOJ announced new charges in a complex case involving defendants in Florida and Ohio that involved applications for $24 million in loans. Among those charged were Joshua Bellamy, a former wide receiver for the New York Jets.

Rabbitt said DOJ will concentrate on prosecuting “coordinated criminal rings that have engaged in systematic, organized conduct to loot the PPP.” FBI Deputy Assistant Director John Jimenez said officials were looking at “individuals we believe that fraudulently requested or received hundreds of millions of dollars” in funds that were meant for business owners to weather the economic blow of the pandemic. The alleged fraud uncovered so far represents only a tiny fraction of the $525 billion in PPP loans that were given out to 5.2 million applicants. Still, it has stirred outrage because some of the money was used to pay for personal extravagances such as Rolex watches, luxury cars, Vegas gambling trips and nights on the town at strip clubs. “I can’t help but be disgusted,” said James Lee of the Internal Revenue Service’s Criminal Investigation unit. Rabbitt said the fraud update was prompted by prosecutors’ reaching a “key milestone” of bringing charges against 57 people as of Thursday.

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