Texas man ‘plundered’ over $15 million in COVID relief funds, New York officials say
A Texas man fraudulently applied for more than $30 million in COVID-19 relief loans, resulting in more than $15 million in government losses, according to officials in New York.
The man, a 33-year-old from Irving, was sentenced to 42 months in prison, according to a Feb. 14 news release from the U.S. Attorney for the Southern District of New York, following the imprisonment of four other people involved in the scheme.
The five co-conspirators “illegally plundered funds meant to financially support struggling businesses,” U.S. Attorney Damian Williams said in the news release. “All defendants in this case will now serve substantial prison time for stealing much-needed relief intended for legitimately deserving companies.”
Attorneys for the people involved could not immediately be reached for comment by McClatchy News.
As a part of the scheme, the group, all but one of whom are Texas residents, fraudulently submitted paperwork to the Small Business Administration as part of the Paycheck Protection Program (PPP) during the first year of the COVID-19 pandemic, officials said.
The scam involved collaborating with people affiliated with real businesses and submitting dishonest or misleading PPP loan applications, officials said.
One application, submitted in June 2020, stated that a company in need of funds employed more than 100 people, officials said. In reality, the company only had four employees.
In total, the government sustained more than $15 million in losses as a result, including about $4 million which was doled out based on bogus applications for companies in New York, officials added.
After being charged in 2021, the Irving man pleaded guilty to one count of wire fraud in April 2022, according to court documents.
On top of his prison sentence, he has been directed to pay $9.3 million back to the government, officials said.
The four co-conspirators received prison sentences ranging from 18 to 90 months, and they have been ordered to pay nearly $20 million back to the government.
Hundreds of people across the country have been charged in connection to similar pandemic scams, according to the Department of Justice.
More than $80 billion in relief loans provided during the pandemic may have been fraudulent, according to the Associated Press, citing a May 2022 report from the SBA’s Office of the Inspector General.
A former U.S. attorney told NBC News that the PPP scams amount to the “biggest fraud in a generation.”
This story was originally published February 14, 2023 at 3:56 PM with the headline "Texas man ‘plundered’ over $15 million in COVID relief funds, New York officials say."