COVID Frauds of the Week: Fraud on the PPP

This week’s COVID-19 frauds centered on (temporarily) successful attempts to receive Paycheck Protection Program (PPP) funds for nonexistent companies and fabricated or inflated employee headcounts. First up is the owner of a wedding planning company that sought personal enrichment via more than $3 million in forgivable PPP loans for his 120 nonexistent employees. Fahad Shah, 44, of Murphy, Texas, was arrested and charged with wire fraud, money laundering, and making...

COVID Frauds of the Week: Consumer and Investor Fraud

Scammers continue to prey on the vulnerable during the COVID-19 crisis, and thankfully, they continue to get busted for it.  This week, the enforcement highlights centered on consumer and investor fraud, although there are surely numerous other kinds of fraud that have not yet been stopped. The Federal Trade Commission this week announced that it had taken legal action to try to shut down a remarkably (and allegedly) brazen scheme. ...

COVID Frauds of the Week: PPP, PPE, and More

As the COVID-19 pandemic continues to batter businesses and everyday Americans, it has been one of the busiest weeks yet for the government agencies stopping fraudsters who target government relief programs.  In new cases filed this week, the government has gone after alleged bogus sales and price gouging of PPE, new frauds on the Paycheck Protection Program (PPP), healthcare fraud, and more. Secret Service Busts Bogus Mask Seller On Thursday,...

COVID Frauds of the Week: More Fraud on the PPP

As we enter our third month of nation-wide shelter-in-place efforts, fraudsters continue to exploit government relief programs. For the second week in a row, the Eastern District of Texas DOJ is going after a purported small business owner for defrauding the Paycheck Protection Program (PPP). Samuel Yates has been charged with wire fraud, bank fraud, and making false statements for allegedly submitting fraudulent loan applications under the PPP program. According...

COVID Frauds of the Week: Unproven Tests, Nonexistent Equipment, Price Gouging, and $10 Million in SBA Loans

Fraudsters continue to attempt to capitalize on anxiety and uncertainty during the pandemic by marketing unproven products and services for the prevention, treatment, or cure of COVID-19. This week, we highlight the massive FTC efforts to identify and shut down illegal activities via Warning Letters (around 100 issued to date); two new SEC actions; as well other government actions to quash sales of unproven or nonexistent test kits and therapies,...

COVID Frauds of the Week: First Charges for Fraud on the PPP

As the COVID-19 crisis continues, so too do the reports of brazen fraud against the vulnerable and the government programs designed to help them.  Like last week, here in our new feature we will focus on some noteworthy trends in government enforcement in this unfortunate new area of fraud. Fraud on Government Spending Notably, we have seen the first of what will undoubtedly be many government enforcement actions targeting fraud...

COVID Frauds of the Week: Misrepresented Mask Inventories and Medicare Fraud

Amid COVID-19-induced fear and hardship, fraud is on the rise. Already, the FTC has received over 18,000 reports of COVID-19 related fraud. In response, the SEC, CFTC, and other regulators announced they are on the lookout for pandemic-related fraud, and the DOJ warned would-be wrongdoers that it will not tolerate profiting off of public panic. This week, we focus on three enforcement actions brought by the government – including, notably,...

COVID-19 Frauds of the Week: Fake Employees and Fake Treatments

Taxpayers, rightfully upset about large companies such as Shake Shack and Ruth’s Chris Steakhouse claiming large sums of Paycheck Protection Program money from the Small Business Administration, should consider shifting some of their ire to applicants posing as the original intended recipients—small businesses—who are getting in on the grift. And for fraudsters who prefer to market unproven products rather than fabricate employee headcounts and loan documentation, opportunities abound amidst the...

Enforcement Push Targeting COVID-19 PPP Loan Fraud Continues: Entities Agree to Pay $12M+ to Settle False Claims Act Charges

By the Constantine Cannon Whistleblower Team The emergency phase of COVID-19 might be over, but the government is still uncovering pandemic-related loan fraud as it continues to announce many enforcement actions. This week, the government announced two Paycheck Protection Program (PPP) loan fraud enforcement actions. One case was brought by a whistleblower and involved a Virginia-based non-profit. A separate case involved Massachusetts businessman Herbert G. Chambers, his entities, and one of...

West Virginia Business Owner Sentenced for COVID Relief Fund Fraud

It appears there is a new name on the list of COVID relief fraudsters—Mark William Bailey, a business owner who evidently couldn’t resist misusing taxpayer-funded pandemic relief for personal luxuries, according to the DOJ this week. After misappropriating approximately $451,237.51 in COVID-19 relief funds guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, through his company RMR Delivery Service Inc., Bailey now...