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 uncertainty and health anxiety surrounding the pandemic. Highlights from this week’s COVID-19-related enforcement actions are detailed below.
Joshua Thomas Argires, 29, of Houston, Texas, applied for more than $1.1 million in loan proceeds for his two businesses—Texas Barbecue and Houston Landscaping. As has been the case with other PPP fraudsters, his employee numbers were fabricated. The Texas Barbecue funds were invested in bitcoin, and the Houston Landscaping cash was slowly depleted via ATM withdrawals. Argires was arrested and charged with making false statements to a financial institution, wire fraud, bank fraud, and engaging in unlawful monetary transactions. (USAO SDTX; DOJ)
Ganell Tubbs, 41, of Little Rock, Arkansas, received nearly $2 million in PPP funds for her two defunct businesses—Suga Girl Customs, and The Little Piglet Soap Company. The proceeds were used to make an $8,000 student loan payment, as well as for online purchases from various retailers. Tubbs was arrested and charged with two counts of bank fraud, two counts of making a false statement on a loan application, and one count of engaging in a monetary transaction with proceeds of unlawful activity. (USAO EDAR)
Oludamilare Olugbuyi, 40, of Washington, D.C., submitted fake and fraudulent documents in support of his application, for which he sought $400,000 in PPP funds. He submitted 1099-MISCs and a tax return that showed over $175,000 in adjusted gross income for 2019. In the real world, however, his actual 2019 return showed $1 in income for 2019, which qualified Olugbuyi to receive a $1200 CARES economic impact payment. (The Coronavirus Aid, Relief, and Economic Security Act, enacted on March 29, 2020, was designed to provide emergency financial assistance to Americans negatively financially impacted by the pandemic.) Olugbuyi is charged with making false statements to a financial institution. (DOJ)
Elijah Majak Buoi, 38, of Winchester, Massachusetts, was arrested and charged for submitting fraudulent PPP applications for over $13 million to support his IT services company, Sosuda Tech LLC. He supported his applications by misrepresenting his employee headcount and his resultant payroll expenses, as well as by falsely certifying that the United States is his employees’ primary residence. He received over $2 million in ill-gotten PPP funds. The charges levied against Buoi carry hefty penalties. He faces up to 20 years in prison, up to 3 years of supervised release, and a fine of up to $250,000 or twice the gross gain or loss for the wire fraud offense. A finding that he made a false statement to a financial institution can land him in prison for up to 30 years, along with up to 3 years of supervised release, and a fine of up to $250,000 or twice the gross gain or loss from the offense. (USAO MA)
Luke John Flint, of Louisville, Kentucky, was ordered to shut down a webpage, 6 related web addresses (“coronavaccine.center”; “coronavaccine.today”; “coronatesting.site”; “coronatesting.center”; “coronavaccine.shop”; “coronavaccine.club”; and “covid19vaccine.center”), and a Facebook page that are being used to lure consumers to pre-register for a COVID-19 vaccine in exchange for $100 in Bitcoin. Flint is not a licensed medical professional, is not registered with the FDA for COVID-19 vaccine research and development, and his Corona Vaccine Center’s address is “nothing more than an empty parking lot/field.” He has signed an agreed injunction, and a federal judge entered an order prohibiting Flint and his website associates from committing wire fraud, maintaining and doing business through the websites and social media, and destroying business records. (USAO WDKY)
Marc Ching, marketer of “Thrive” supplement, was ordered by the FTC to stop making baseless claims that Thrive can treat, prevent, or reduce the risks from COVID-19. He marketed Thrive as an “anti viral wellness booster” on his Whole Leaf Organics website, and falsely claimed that Thrive’s benefits were clinically proven. (FTC)
Huu Tieu, 58, of Porterville, California, president and CEO of Golden Sunrise Pharmaceutical Inc. and Golden Sunrise Nutraceutical Inc., was arrested after a 5-count grand jury indictment was returned, charging him with mail fraud and introducing a misbranded drug into interstate commerce with the intent to defraud. In perhaps the most dramatic and heartless fraud example this week, Tieu told an undercover investigator with the Tulare County District Attorney’s Office, who claimed to have a 68-year-old mother who was very sick with COVID-19. When the investigator asked if she should take her mother to the hospital, Tieu responded, “No. You cannot go in there,” and instead encouraged her to use Golden Sunrise Products, which consisted of herbal mixtures dubbed the “Emergency D-Virus Plan of Care.” Tieu’s foiled plans included soliciting sales of his products so he could then turn around and submit reimbursement claims to the patients’ insurers, including Medicare and Medi-Cal. Tieu faces up to 20 years in prison and a $250,000 fine for the mail fraud counts, and 3 years in prison and a $10,000 fine on misbranding counts. (USAO EDCA)
If you have information about frauds related to COVID-19, or any other fraud on government programs, contact us.
- COVID-19 Fraud
- Fraud on the PPP
- Government Contract Fraud
- Other Posts on COVID-19 Fraud
Tagged in: Catch of the Week, COVID-19, Government Procurement Fraud, Misrepresentations,