Lavish Lifestyle

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The Paycheck Protection Program (PPP), an SBA-backed loan that helped businesses keep their workforce employed during the COVID-19 crisis, ended May 31, 2021. But the fraud cases regarding millions of dollars stolen from the government program have only just begun.

Today’s fraud spotlight is on Marcus Frazier of New York, N.Y., one of the many individuals recently convicted of COVID-19 related fraud. He sought more than $6.9 million in PPP loans and was awarded approximately $2.17 million. (But this free money really wasn’t free in the end.)

Frazier, like many other criminals who sought to obtain millions in government-guaranteed loans for non-existent businesses, lied about the number of employees his purported businesses had and the salaries he paid them. Between May 2020 and April 2021, Frazier submitted at least seven applications for PPP loans. (They were for several businesses he allegedly controlled.)

The applications used erroneous information from bogus statements listing the number of employees and the payroll amount for each business. Falsified bank statements, which were submitted to back up the fraudulent claims, showed the balance of a checking account as much greater than it actually was, and documented payroll withdrawals that never happened.

Frazier also conjured up a list of employees on the payroll across his businesses, including Social Security numbers, which did not match the Social Security Administration’s records. (They didn’t match because Frazier fabricated the employee records.) Frazier knew that he could collect more funds if he had more employees.

The lies kept on coming. Frazier claimed that one of the businesses he submitted an application for had existed for a decade. But, when investigators dug a little deeper, they found that the corporate entity was registered around July 2020, a few months after the onset of the COVID-19 pandemic.

Are you curious as to how Frazier spent the $2.17million he received? Well, here’s the approximate breakdown:

  • $124,982 on hotels, including more than $88,791 at a Miami-based luxury hotel
  • $63,000 on restaurants and food service
  • $17,000 on transportation via Uber
  • $16,519 on airline travel
  • $11,000 on clothing

It’s also important to note that during the same time Frazier was on a spending spree, he also collected approximately $21,000 in unemployment benefits. (He was certainly living the high life.) And that’s not all, folks.

Between January 2018 and November 2019, Frazier engaged in a scheme to obtain personal loans from financial institutions and to evade the payment of credit card debt by making false representations, and sending fake documents, to lenders and banks(This guy was juggling many scams at the same time. But he eventually he dropped a ball or two. They always do.) 

The 48-year-old New Yorker pled guilty to two counts of wire fraud affecting a financial institution, with each carrying a maximum sentence of 30 years in prison. He awaits sentencing on March 1, 2022 for the crimes that funded his lavish lifestyle, while deserving loan recipients went without financial support during a very trying time. (Let’s hope the judge lavishes an appropriate sentence for this criminal’s brief lavish lifestyle funded by taxpayer dollars.)

Today’s Fraud of the Day comes from a Department of Justice press release, “Manhattan Man Pleads Guilty To $6.9 Million Scheme To Defraud Loan Program Intended To Help Small Businesses During COVID-19 Pandemic,” dated October 25, 2021.

Damian Williams, the United States Attorney for the Southern District of New York, announced today that MARCUS FRAZIER pled guilty to carrying out a fraudulent scheme to obtain $6.9 million in government-guaranteed loans designed to provide relief to small businesses during the novel coronavirus/COVID-19 pandemic.  FRAZIER pled guilty before United States District Judge Alison Nathan, to whom his case is assigned.

U.S. Attorney Damian Williams said: “Marcus Frazier sought millions of dollars in unsecured SBA-guaranteed loans for which his businesses did not qualify.  He lied about the number of people employed by his businesses, the salaries they were paid, even that these employees existed.  Further, Frazier used the loan proceeds he obtained to fund his lavish lifestyle, not to pay permissible expenses.  Now Marcus Frazier awaits sentencing for his admitted crimes.”

 

 

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Larry Benson, Senior Director of Strategic Alliances, LexisNexis Risk Solutions - Government

Larry Benson is responsible for developing strategic partnerships and solutions for the government vertical. His expertise focuses on how government programs are defrauded by criminal groups, and the approaches necessary to prevent them from succeeding.

Mr. Benson has 30 years of experience in sales and business development. Before joining LexisNexis® Risk Solutions, he spent 12 years founding and managing two software technology startups. During the 1990s he spent 10 years as a Regional Director helping to grow a New England-based technology company from 300 employees to 7,000. He started his career with Martin Marietta Aerospace working on laser guided weapons and day/night vision systems.

A sought-after speaker and accomplished writer, Mr. Benson is the principal author of “Fraud of the Day,” a website dedicated to educating government officials about how criminals are defrauding government programs. He has co-authored WTF? Where’s the Fraud? How to Unmask and Stop Identity Fraud’s Drain on Our Government, and Data Personified, How Fraud is Changing the Meaning of Identity.

Benson holds a Bachelor of Science in Physics from Albright College, and earned two graduate degrees – a Master of Business Administration from Florida Institute of Technology, and a Master of Science in Engineering from Lehigh University.