U.S. Attorney for the Northern District of Texas Leigha Simonton announced Federal charges on June 28 against 14 people who allegedly defrauded the Small Business Administration’s SBA COVID-relief Paycheck Protection Program (PPP) of $53 million.
The charges follow an investigation led by the Pandemic Response Accountability Committee (PRAC) Fraud Task Force which found in February that fraudsters had swindled SBA relief programs of an estimated $5 billion.
“Defrauding the government is an affront to American taxpayers. Defrauding the government during a pandemic – at a time when millions of hardworking entrepreneurs struggled to make payroll and rent – is pouring salt in a wound,” said Simonton.
“These defendants allegedly conspired to steal tens of millions of dollars from the Paycheck Protection Program – funds which could have helped legitimate businesses pay their bills and keep their employees afloat,” said Simonton.
The PPP program was created after the Covid-19 pandemic when businesses across the country were dealing with financial distress due to the pandemic.
According to the indictment papers, the alleged fraudsters concocted the scheme after having purportedly operating a series of recycling businesses where at least 29 Paycheck Protection Program (PPP) loan applications were filed with the SBA.
“These individuals allegedly conspired to orchestrate multiple fraud schemes which exploited financial institutions and government programs, solely to enrich themselves,” said FBI Dallas Special Agent in Charge Chad Yarbrough.
“We will continue to work with our partners to ensure that the American people do not fund the lifestyle of criminals with taxpayer dollars intended to protect the most susceptible from financial ruin and promote economic stabilization in a critical time of need,” said Yarbrough.
The defendants were arrested in Texas, California, and Oklahoma by agents of the FBI, Treasury Department, and Federal Deposit Insurance Corp. They include Mihir Patel, chief financial officer of Sunshine Recycling, and Kinjal Patel, controller at the same company.
