COVID Feature: Double Scam

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Russian hacker hacking the server in the dark

Samuel Yates of Maud, Tex., has been charged with allegedly filling out fraudulent applications for more than $5 million dollars in Paycheck Protection Program (PPP) loans. Yates was charged with two counts of wire fraud for seeking PPP loans from two different Texas-based banks. (He tried to scam both financial institutions using the same scheme.)

PPP loans are forgivable loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The CARES Act initially authorized up to $349 billion in forgivable loans to small businesses for job retention purposes and for certain other expenses.

In April 2020, Congress authorized an additional $300 billion in PPP funding. The PPP loans were intended to be used by small businesses to make payroll. (They were not intended to be used by criminals for personal expenses or shopping sprees.)

The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of one percent. (That is a sweet deal.) The program allows the interest and principal of the loans to be forgiven if they are used on payroll costs, mortgage interest, rent, and utilities.

Yates applied for $5 million in PPP loans by fraudulently claiming he needed help making a monthly payroll of more than $2 million for over 400 employees. (Since Yates didn’t have any employees, this was an outright lie.)

In a second application, Yates claimed to employ over 100 individuals and was able to obtain a loan of more than $500,000. Yates lied again on his fraudulent application by submitting a list of fictitious employees. (He used a name generator on the internet to help him come up with 400 “believable” names.) Yates also allegedly submitted forged tax documents with each application.

As the pandemic lingers on, you can expect to see more cases involving COVID-19 fraud. If you have any information about fraud involving COVID-19, report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form.

Today’s Fraud of the Day comes from an article, “Texas Man Samuel Yates Charged With $5 Million COVID-Relief Fraud,” published by CBSDFW on January 15, 2021.

TEXARKANA, Texas (CBSDFW.COM) – Thirty-two-year-old Samuel Yates of Maud, Texas was charged with allegedly filing bank loan applications fraudulently seeking more than $5 million dollars in forgivable loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Yates was charged with two counts of wire fraud returned by a federal grand jury in Texarkana on Jan. 14, 2021. He allegedly sought millions of dollars in forgivable loans guaranteed by the SBA from two different banks by claiming to have more than 400 employees earning wages when, in fact, no employees worked for his purported business.

 

 

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.