A Texas man is the latest to be charge with trying to defraud the Paycheck Protection Program (PPP). The Justice Department said he submitted a list of employees obtained from a publicly available random name generator on the Internet, along with forged tax documents.
Samuel Yates, 32, of Maud, Texas, allegedly sought $5 million in PPP funds from two different banks by claiming to have more 400 employees.
In the application submitted to the first lender, Yates allegedly sought $5 million in PPP loan proceeds by fraudulently claiming to have 400 employees with an average monthly payroll of $2 million. In the second application, Yates claimed to employ more than 100 individuals and was able to obtain a loan over $500,000.
With each application, Yates submitted a list of purported employees that he obtained from a publicly available random name generator on the internet. He also submitted forged tax documents with each application.
“This defendant allegedly sought to steal millions of dollars in loans intended to aid legitimate small businesses grappling with the economic effects of COVID-19,” Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division said in a press release announcing the charges. “The department and our law enforcement partners will use all the tools at our disposal to investigate and prosecute frauds against the Paycheck Protection Program.”
Yates is charged by way of a federal criminal complaint with violations of wire fraud, bank fraud, false statements to a financial institution, and false statements to the Small Business Administration.
We encourage lenders to be very careful, and to report suspicious applications,” U.S. Attorney Joseph D. Brown of the Eastern District of Texas said. “It is a priority of the Department of Justice to deter and prosecute this type of fraud.”
“Providing false statements to gain access to SBA’s programs will be aggressively investigated by our office,” added Special Agent in Charge Donald Abram of SBA OIG’s Central Region.
A federal criminal complaint is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Trial Attorney Louis Manzo of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Frank Coan for the Eastern District of Texas are prosecuting the case.
The Justice Department acknowledges and thanks the SBA Office of Inspector General, and U.S. Postal Inspection Service for their efforts investigating this mater.
“Today’s arrest should serve as a strong deterrent to anyone considering exploiting the COVID-19 pandemic to enrich themselves through fraud. These individuals have no concern for legitimate businesses whose employees and their families are hurting financially during these unprecedented times,” said Special Agent in Charge Ryan L. Spradlin of U.S. Immigration and Custom’s Homeland Security Investigations (HSI) Dallas.