COVID RELIEF FRAUD
I recently had an agent that contacted me to inquire on how people were able to get access to hundreds of thousands of dollars in funding from the SBA while she wasn’t approved for anything when she put in her request. I explained that it was largely because folks who received large sums of money either had businesses that required that level of support due to the pandemic or they created false documentation to trick the SBA into providing them the funding. Fraud. By the very meaning of the word, you acquired property, information or funding under false pretenses which is criminal behavior.
Many people who never conducted any criminal activity in their life got caught up in the quick and large sum of cash they were granted because of several flaws in the entire process. Part of the reason this scam was so easy to commit is because the SBA was not cross-referencing information with the IRS before they made a decision to grant you the funding. If they had done so before initiating payments, many people would have never received funding.
For example, Pastor Mack De’von Knight was charged with 5 counts of fraud by lying to the Small Business Administration (SBA) in connection with his Economic Injury Disaster Loan application. With the information he provided, he was able to secure $149,900. After securing the funds based on fraudulent information he provided about his businesses, he used the money to purchase a Mercedes-Benz S-Class sedan. He now faces up to 30 years in prison for this.
The program was established to help companies survive pandemic-related losses. By fraudulently taking this money, you cost someone their job and forced the shut down of several businesses. Many people saw the actions of those like Pastor Knight and made the decision to participate in scamming the government as well. Understand that the government doesn’t move swiftly so while no one may say anything instantly when you commit these types of crimes, please note that eventually they will get to you. The IRS works the exact same way. If you find yourself having to create documentation or make up information that you need to submit, it would be best not to pursue the funding.
Some have stated that they believe this was a scheme by the government to find a reason to arrest people and put them in prison. Actually, that is not the case at all. The reason the SBA did not do enough cross-checking during the processing of applications is because the whole goal was to get resources to these businesses as quickly as possible. It was not believed that everyday citizens would have taken the time necessary to complete the application process especially when they knew they did not own businesses. This is very sad. I just hope that it does not convince the government not to attempt to help should we ever face another national crisis in the future.