A year ago, Congress agreed to spend hundreds of billions of dollars on benefits for small businesses and employees devastated by the coronavirus pandemic.
Of course, the government document helped the struggling economy. But it also opened the door for a menagerie of crooks to steal the federal get-rich-quick scheme.
Among them: a South Florida man allegedly bought a Lamborghini for $ 318,000 with millions in COVID-19 relief loans; a Broward County tax preparer who allegedly pocketed huge commissions for filing $ 28 million in bogus business loan applications; and a former Miami NFL player accused of stealing people’s identities to collect $ 300,000 in unemployment insurance benefits.
As the nation’s No.1 fraud capital, South Florida led the wave of financial crime that followed the passage of the CARES Act, a group of federal enforcement officers acknowledged on Friday. of the law. They highlighted dozens of new and old criminal cases involving COVID-19 to draw attention to the escalating problem. Over the past year, federal prosecutors in South Florida have filed 38 criminal cases with $ 75 million in fraudulent compensation claims for COVID-19 – the highest number of any region in the country.
US lawyer Ariana Fajardo Orshan has lamented the region’s questionable reputation while condemning criminals who steal the taxpayer-funded relief program at the expense of legitimate businesses and employees desperately trying to stay afloat.
“It’s very sad when there are so many Americans in this country starving to death from the pandemic,” Fajardo said during a press conference live at the US attorney’s office in Miami. “Leave the money to those who need it.”
Fajardo – surrounded by regional officials from the FBI, IRS, US Postal Inspection Service and other federal agencies – focused on three major programs that were exploited following the adoption last year of the CARES law. They are known as the Paycheck Protection Program (P3), Economic Disaster Loans (EIDL), and Unemployment Insurance.
Here is a trio of new cases cited by authorities:
– Wally Dorlus, 41, a tax preparer in Margate and two other men from South Florida are charged with conspiracy to obtain fraudulent PPP loans from the Small Business Administration using falsified employee information , payroll and taxes. According to a criminal complaint, Dorlus received hefty commissions in exchange for filing more than 167 fraudulent PPP loan applications worth $ 28 million. Of these, 33 loans were approved by banks and funded by $ 5.5 million guaranteed by the SBA.
– Kenbrell Armod Thompkins, 32, former NFL wide receiver who played at Miami Northwestern Senior High School, is accused of stealing the identities of numerous Florida residents to obtain fraudulent UI benefits totaling 300,000 $ from the State of California. This state distributed the unemployment benefit funds in the form of debit cards, which were then mailed to addresses associated with Thompkins in Miami and Aventura. Thompkins is accused of withdrawing most of the funds on debit cards from Miami-Dade ATMs.
– Kimberly Cleare, 53, of Miami Gardens, is responsible for submitting at least 13 nearly identical EIDL applications to the Small Business Administration for herself and others.
Although South Florida was the focus of Friday’s press conference, an IRS official said the agency was working on 350 criminal cases and would open nationwide investigations involving around $ 440 million. of COVID-19 relief requests filed “fraudulently by greedy criminals”. Tyler R. Hatcher, acting special agent in the Miami IRS Criminal Investigations Division, estimated that half of those bogus loan applications – $ 220 million – were paid, a significant loss for taxpayers. Hatcher said the IRS hopes to get some of that money back.
Despite efforts by banks to review applicants’ COVID-19 loan applications, some misrepresentation passes because bankers do not verify the history of taxpayer businesses and illegitimate employees. The root of the problem is that the government, which guarantees the loans as long as they are used for payroll, rent, and other legitimate expenses, kicked out the relief funds as quickly as possible to revive the faltering economy.
“Yes, it’s not a perfect system,” said Fajardo, who resigned her post as a US lawyer in South Florida on Friday as part of a routine transition during a change of presidency last fall. “There is no such thing as a perfect system.”
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