It's the talk of the town in Braddock: dozens of people are getting tens of thousands of dollars each in Paycheck Protection loans despite having no real signs of present or prior employment. KDKA Investigator Andy Sheehan goes on the trail of more than $600,000 federal tax dollars and whether they're being properly spent.
KYM GABLE: Well, this story is the talk of the town in Braddock. Dozens of people getting tens of thousands of dollars each in Paycheck Protection loans despite having no real signs of present or prior employment.
STACY SMITH: KDKA investigator Andy Sheehan goes on the trail of more than $600,000 federal tax and whether they are being properly spent.
ANDY SHEEHAN: Are the claims legit, or are more than 30 people here in Braddock and parts of North Braddock trying to game the system?
So, we began knocking on doors trying to find out how, in the last days of April, did these people get approved for tens of thousands of dollars each in PPP, the federal government's Payroll Protection Program? The first thing we found out was many of them didn't live in the address they filed under, which, according to property records, have different owners.
- He doesn't live here.
ANDY SHEEHAN: He doesn't live here?
- I didn't approve him to use my address.
ANDY SHEEHAN: No?
- No. He don't stay here.
ANDY SHEEHAN: All the recipients filed as sole proprietors, meaning they own and operate a business generally by themselves. Each of them claimed the maximum and forgivable loan of $20,833, saying they would have done at least $100,000 worth of business in the year if not for COVID. Several listed those businesses as barbers and hairstylists, but we checked. None of them operate a shop or are licensed by the state as barbers or cosmetologists, as required by law, including a woman who claims to live at this address who got approved for two maximum loans of more than $40,000 as a hairstylist.
- She doesn't live here.
ANDY SHEEHAN: Well, she's getting a loan from this address.
- Well, I don't know nothing about that, sir.
ANDY SHEEHAN: Is she a haircutter?
- No, she's not.
ANDY SHEEHAN: Or the man who lives here who filed for $20,000 in loans, even though we verified he's not licensed and has no shop. Neighbors say they don't know of him ever cutting anyone's hair, but he, like several others, did not come to the door.
This house is vacant and abandoned, but a woman who claims to live here is getting $20,000 as a self-employed food service contractor.
GUY COLLINS: A lot of them aren't licensed and some of the places are abandoned and some of the people basically are nonexistent.
ANDY SHEEHAN: We brought our findings to the attention of Braddock Police Chief Guy Collins, who began his own investigation, knocking on doors and finding his own evidence of possible fraud.
GUY COLLINS: I'm finding out there's a lot of people out here are so-called businesses that, they don't exist. And apparently they've been applying for this PPP money and they've been receiving it.
- Is there something we can help you with?
ANDY SHEEHAN: According to records, a woman who states this as her address filed for $20,000 as a caterer. I spoke with a man who says he is her stepfather who found that surprising.
Says she's a caterer.
- She says she's a caterer?
ANDY SHEEHAN: Right. She cater?
- Not that I know.
ANDY SHEEHAN: The chief says he is turning this over to the US Attorney's office for investigation, believing there is an organized fraud ring operating in his town.
GUY COLLINS: If you have that many people in this general area, I would say there has to be some kind of connection.
ANDY SHEEHAN: The Small Business Administration, which administers the program, concedes it is, quote, "vulnerable to fraud," and says it investigates all suspicious claims. Quote, "the agency isn't able to provide a timeframe on the resolution of many of these identity theft complaints. The SBA encourages anyone suspecting fraud or misuse of relief programs to report them."
Reporting in Braddock, Andy Sheehan, KDKA News.