Maybe it’s just a dark side of my nature, but I love stories of financial fraud. What makes these people do it? How can they sleep at night? And these are heady times for fans of small business fraud stories.
Thanks to the Paycheck Protection Program (PPP) coronavirus bailout and a slew of investigations made public recently by the Justice Department, the stories of fraud continue to roll in.
Take Joshua Bellamy. The 31-year-old wide receiver – well, former wide receiver – for the New York Jets has been charged with obtaining millions in PPP loans by submitting false documentation and then spending the money on things like jewelry, expensive clothes and about $63,000 on what must have been one hell of a weekend at the Seminole Hard Rock Hotel and Casino in Florida.
Speaking of Florida, where so many of these things seem to happen, there’s the roofer who applied for and received PPP money, and then rather than using it for payroll instead allegedly took $689,417 of it and bought a 40ft boat.
One Virginia business owner and his wife got a little more complicated. They allegedly formed four shell companies and over a three-week period applied for 18 PPP loans amounting to more than $6.6m under the pretense that the money would be used for payroll commitments that didn’t exist. They actually got $1.4m of the money and promptly tried to flee to Poland where they were caught at the airport.
Then there were the bankers – yes, big surprise, I know - at JP Morgan Chase who I guess saw all that government cash flowing to those small business owners and apparently decided – because they don’t make enough themselves – that the money would be much better off in their pockets rather than being used for silly things like employing people or paying rent. So they made false applications for Economic Injury Disaster Loans and deposited the funds in their personal accounts. Until, of course, internal auditors noticed the transactions and notified management who fired the culprits.
Want a few more?
There’s the young (22 years old) entrepreneur in Texas named Lola who applied for PPP money to cover the costs of “several employees and large payroll expenses” but in the end had neither. There were two men in Spartanburg, South Carolina, who were caught allegedly “laundering” more than $390,000 of PPP money through casinos and a heroin and meth ring and there I was thinking Walter White was dead. There’s the Seattle doctor who had a criminal history and allegedly sought millions in PPP loans for businesses with no actual operations by submitting applications with made up numbers and fake documentation. And the marketing guy in San Diego whose latest and most brilliant campaign was to create fake employees and pitch the government for money except that idea, like most marketing ideas, turned out to be not-so-brilliant.
My favorite is a guy named David Hines who got $4m in loans and used it to buy a Lamborghini, jewelry, clothes, nights at the Fontainebleau Hotel and thousands of dollars on “dating” websites.
There can not be any doubt that there are many others out there that we don’t know about, happily living their lives in Poland or elsewhere because they figured out how to steal taxpayer money and get away with it.
As I wrote previously, the stimulus process was flawed because it had to be: money needed to quickly get in the hands of small business owners who truly needed it and we all knew there were gaps in the process. It’s important that the government investigate, if only just to show that they’re paying attention. They’ll never catch all the crooks. But as Congress discusses the next round of PPP let’s hope all these Netflix-worthy stories don’t give too many other people ideas.