Welcome to the
Fraud of the Day Website!

Search
Close this search box.

COVID Feature: Double Scam

COVID Feature: Double Scam

Russian hacker hacking the server in the dark
Senior Director of Strategic Alliances
LexisNexis Risk Solutions - Government

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.

Related Articles

Get Your Fraud Fix!

Five days a week wake up to the most current fraud article in your inbox

Contact Us

Thank you for your interest in Fraud of the Day. For more information, please complete the following form.
To receive the most current fraud articles direct to your inbox, click the Subscribe button above.

"*" indicates required fields

Hidden
Would you like to subscribe to our Blog?
We respect your privacy.
This field is for validation purposes and should be left unchanged.

SUBSCRIBE TODAY

Fill out the form below to receive the Daily Fraud Highlight, the Weekly Fraud Summary or both. Thank you for your interest in FraudoftheDay.com.

"*" indicates required fields

Name*
Subscription Type*
This field is for validation purposes and should be left unchanged.