Something Rotten

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Male hands counting dollars, black salary, money laundering, illegal business, stock footage

The owner of a Virginia refuse company applied for a Paycheck Protection Program (PPP) loan in June 2020, stating that Debris or Not Debris Property Preservation would use the funds for business-related purposes, such as payroll, lease, and utility costs. Owner Scott Suber spent the fraudulently obtained COVID-19 aid for a trip to Las Vegas, payments to non-business related individuals, and other personal use. (I guess what happened in Vegas did not stay in Vegas.)

Suber claimed his business had eight employees and an average monthly payroll of $140,000. He even submitted a fake quarterly federal tax return stating the business had quarterly wages of $420,000 and federal tax withholding of $36,620. (So, Einstein, you thought there’s no way to check up on that return by, say, contacting the IRS?) Suber also submitted a bank statement with an altered date in support of the application.

Based on his fraudulent application, Suber received a PPP loan of $350,000. Fortunately, authorities smelled a rat. “The defendant used fraud and deception to exploit a critical COVID-19 relief program for his own personal gain,” said Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia. “Defrauding the Paycheck Protection Program wastes taxpayer dollars and keeps vital assistance from reaching those who are in genuine need of these funds.” (It’s a genuinely stinky thing to do.)

If found guilty on all charges, Suber faces a maximum penalty of 30 years in prison. He pleaded guilty to bank fraud in December 2020 and was sentenced in May 2021 to two years in federal prison.

Today’s Fraud of the Day comes from a press release from the U.S. Attorney’s Office for the Eastern District of Virginia, “Virginia Beach Businessman Sentenced for COID-Relief Fraud Scheme,” dated May 20, 2021.

NORFOLK, Va. – A Virginia Beach man was sentenced today to two years in prison for bank fraud by submitting a fraudulent application for a Paycheck Protection Program (PPP) loan, and then using the loan proceeds for his own personal benefit.

“The defendant used fraud and deception to exploit a critical COVID-19 relief program for his own personal gain,” said Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia. “Defrauding the Paycheck Protection Program wastes taxpayer dollars and keeps vital assistance from reaching those who are in genuine need of these funds. EDVA will continue bringing to justice those who seek to illegally profit from the pandemic.”

Additional information is from a WAVY.com article, “Virginia Beach man pleads guilty and sentenced for COVID-Relief Fraud Scheme,” dated December 9, 2020 and updated May 20, 2021.

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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.