“Maximizing gains” and “committing fraud” became synonymous during the pandemic. In early 2021, Lisa Smith submitted Paycheck Protection Program loan applications for two companies that she controlled. In order to maximize her gains (here comes the fraud) in the scheme, the applications included fake bank statements and fake IRS tax forms, which significantly overstated her companies’ number of employees and payroll expenses. As a result, Smith obtained $125,000 in PPP loans based on these fraudulent applications. Confident from her success of her scheme, Smith wanted more.
Zig Ziglar famously said, “You can have everything in life you want if you will just help enough other people get what they want.” Smith was all about mentoring others. Shared victory for all fraudsters. Smith recruited individuals who owned companies with little or no operations to apply for PPP loans. Copying the blueprint from her own fraudulent application, Smith helped the recruited individuals submit PPP loan applications that contained fake bank statements and fake IRS tax forms, and that contained materially false representations about the companies’ number of employees and payroll expenses. Sounds like multi-level marketing.
Based on these fraudulent PPP loan applications, more than 25 PPP loans totaling more than $3.5 million were approved and funded. Smith received a percentage of the loan proceeds as compensation for her role. On July 18, 2024, Smith pled guilty to COVID-19 Loan fraud. The count of conspiracy to commit bank fraud is punishable by a maximum of thirty years in prison and a $1 million fine. Sentencing is scheduled for Nov. 21, 2024.
Great job by special agents of the FBI’s South Jersey Resident Agency.
Today’s Fraud of The Day is based on article “Woman Admits to Multimillion-Dollar COVID-19 Fraud Scheme in NJ Court” published by RLS Media on July 18, 2024.
NJ authorities announced that a North Carolina woman admitted conspiring to submit fraudulent applications, leading to the issuance of 29 Paycheck Protection Program (PPP) loans totaling more than $3.5 million. U.S. Attorney Philip R. Sellinger stated that Lisa Smith, 61, of Cornelius, North Carolina, pleaded guilty before U.S. District Judge Karen M. Williams in Camden federal court on July 17, 2024, to an information charging her with one count of bank fraud conspiracy.
According to documents filed in these cases and statements made in court: In early 2021, officials said, Smith submitted PPP loan applications for two companies that she controlled. The applications included fake bank statements and fake IRS tax forms and significantly overstated the companies’ number of employees and payroll expenses, officials say.
