Federal authorities are just beginning to scratch the surface of holding fraudsters responsible for stealing more than $200 billion through the U.S. Small Business Administration's Paycheck Protection Programs and Coronavirus Economic Injury Disaster Loan programs.
Here in the Chicago area, people from all walks of life — teachers, police officers, government workers, Cook County Jail inmates — have been arrested and many others accused of securing PPP loans often through applications filled with lies. Although not all of them were charged criminally, they faced repercussions.
However, one class of fraudsters has mostly escaped punishment for defrauding the program designed to help small businesses weather the pandemic, as Frank Main reported in the Sun-Times recently. These informal brokers enticed others to join the scam and received commissions in exchange for helping fill orders. But many people who have used these suspicious intermediaries seem reluctant to give them up, which can prolong investigations.
It's time for them to come clean.
And at the Illinois Department of Human Services, 10 out of 12 workers busted for such activities disclosed that someone else had filled out PPP loan applications for them. Mayne reported that half of them admitted to paying a bribe to the middleman. All of those workers, who collectively received $275,000 in PPP loans, have since been fired.
Another woman, a Chicago Housing Authority resident, said she made a deal with a broker to split the $42,000 she received in 2020 and 2021 after that person helped her with paperwork to get the loans. That woman's housing rental subsidy voucher was revoked, though she eventually got it back late last month when the Illinois Court of Appeals ruled there was insufficient evidence of wrongdoing.
The woman admitted she did not own a small business, so not everyone would believe she was an “unwilling victim” who was tricked into believing she was applying for a grant when she contacted the broker on Facebook. In the end, she had to answer for what she calls “unintentional mistakes.” Meanwhile, the middleman she hired remains scot-free, likely because the woman didn't give a name.
Of the dozens of IDHS workers investigated for PPP fraud, only three were identified who assisted them with their false claims.
Investigators cannot turn a blind eye to these intermediaries, but they cannot hold fraudsters accountable for their actions if their group remains quiet.
The people who paid the price for engaging in PPP fraud owe it to their fellow citizens to speak up if they get help. Otherwise, they will appear as a cover for the main players of one of the largest financial frauds in the history of this country.
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