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Common Modus Operandi

Common Modus Operandi

Senior Director of Strategic Alliances
LexisNexis Risk Solutions - Government

Common Modus Operandi: a distinct pattern or method of operation. So says the definition in the Webster Dictionary. This Latin phrase is most often used to describe a particular way or method of doing something, especially one that is characteristic or well-established. Any recognizable pattern of physical evidence could be identified as a common modus operandi. An example being the fourteen defendants indicted on July 5, 2023, for COVID-19 Paycheck Protection Program Fraud. All allegedly overstated payroll costs and lied on bank statements and tax forms to steal funds from financial institutions and the federal government. Sounds like all federal loan fraud cases during the pandemic. Common Modus Operandi.

These fourteen fraudsters allegedly bilked the COVID-19 Paycheck Protection Program and numerous financial institutions out of more than $53 million in loan proceeds. Congratulations to the Pandemic Response Accountability Committee (PRAC) Fraud Task Force. This is the largest case investigated by a federal agency intended to investigate fraud and other abuses of pandemic-era relief programs to date! They allegedly submitted at least 29 Paycheck Protection Program (PPP) loan applications that fraudulently inflated payroll expenses, doctoring bank statements and Internal Revenue Service tax forms to falsely reflect business income. They then routed PPP loan funds through a series of bank accounts to create a false paper trail of payroll expenses.

Several of the charged defendants purportedly operated a group of affiliated recycling companies, including Mammoth Metal Recycling, Elephant Recycling, Gulf Coast Scrap, 4G Metals, 4G Plastics, 5G Metals, Level Eight, Sunshine Recycling, L.K. Industries, NTC Industries, West Texas Equipment, and West Texas Scrap. Too bad they decided to fill their own pockets and not do what the PPP was set up for- to keep employees employed.

Great job by the Pandemic Response Accountability Committee (PRAC) Fraud Task Force.

Today’s Fraud of The Day is “Corporate Executives Indicted in $53 Million Federal Paycheck Protection Program Fraud” published by The Texan on July 5, 2023

Fourteen corporate employees are facing decades in prison on charges of conspiracy, bank fraud, wire fraud, and making false statements.

The U.S. Department of Justice (DOJ) announced a number of indictments against business owners and operators, accusing them of swindling $53 million from pandemic-era federal aid programs.

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