A 32-year-old Texas man was charged Tuesday in the Eastern District of Texas with bank fraud, wire fraud and misrepresentation. He is said to have requested millions of dollars in loans intended to help those affected by the coronavirus.
Samuel Yates of Maud, Texas, is accused in a federal criminal complaint of asking for $ 5 million in repayable loans from the Small Business Administration, prosecutors said. He also submitted false tax documents, they added.
“Whenever the government provides large sums of money to the public, there are people who try to cheat the system,” US Attorney Joseph D. Brown of the Eastern District of Texas said in a press release. “We encourage lenders to be very careful and report suspicious claims. It is a priority for the Department of Justice to deter and prosecute this type of fraud. ”
According to court documents filed with the U.S. District Court in Texarkana, Texas, Yates used a random name generator on the Internet to build his list of employees. Yates is said to have filed claims with two lenders. The first request sought $ 5 million in paycheck protection program loans, claiming it had a business employing more than 400 people, with a monthly payroll of $ 2 million. In the second request, to another lender, Yates claimed over 100 employees and obtained a loan of over $ 500,000.
Paycheque Protection Program
The paycheck protection program is part of the CARES law, enacted in March. The PPP allows small businesses and other qualified organizations to receive loans at low interest rates for two years. They are to be used to pay the company’s labor costs, mortgage interest, rent, and utilities.
“Today’s arrest is expected to have a strong deterrent effect on anyone considering exploiting the COVID-19 pandemic to enrich themselves through fraud,” said US Immigration and Custom’s Agent Ryan Spradlin Homeland Security Investigations. “These people don’t care about the legitimate businesses whose employees and their families are suffering financially in these unprecedented times. ”
The Department of Justice urges all U.S. financial institutions to immediately report all suspicious or suspected fraudulent apps.