A former Miami-Dade Corrections and Rehabilitation sergeant has been sentenced to one and a half years in prison for submitting hundreds of thousands of dollars in false loan applications for COVID-19 relief funds that were meant for struggling businesses during the pandemic.
Arashio Harris, 49, who pleaded guilty to wire fraud in August, was ordered to pay back more than $432,000 to the U.S. government after admitting that he applied for two Paycheck Protection Program loans as well as two Economic Injury Disaster Loans to “unlawfully enrich himself,” according to court records.
U.S. District Judge Cecilia Altonaga sentenced Harris in Miami federal court on Friday, ordering him to surrender to prison authorities immediately. He is among a string of South Florida corrections and police officers who have been charged with fleecing the pandemic-relief loan programs since it was adopted in 2020.
Among the latest: 17 Broward Sheriff’s Office deputies and jail guards were accused this month of receiving about $500,000 in U.S. government-backed COVID-19 loans through fake business applications.
The Paycheck Protection Program, which was passed by Congress to help keep businesses intact and the economy going during the pandemic, allocated about $800 billion in loans through banks. The Small Business Administration guaranteed the loans. In almost all instances, the loans were forgiven as long as the money was used for payroll and other legitimate overhead costs. The Economic Injury Disaster Loan program was also activated to help businesses during the pandemic.
But Harris, with the help of an associate, submitted applications to abuse these programs as the owner and president of the Nevada-based Good Family Property Solutions Inc. and Flying Lions LLC, according to a factual statement filed with his plea agreement.
Series of loans
In 2020, Harris claimed that Good Family Property Solutions made $130,000 and had nine employees before the pandemic. That opened the door for the company to receive a $9,000 advance, which didn’t need to be paid back, and $14,500 in an Economic Injury Disaster Loan.
Months later, he submitted another bogus application, court records say. This time, Harris claimed that Flying Lions made $480,000 and had 10 employees before the pandemic. The company got $150,000 in an Economic Injury Disaster Loan.
The Miami-Dade man then decided to expand his scheme to PPP loans under the guise that Good Family Property Solutions had 10 employees — and a payroll of almost $52,000 every month. Harris, according to his factual statement, submitted fabricated paperwork that stated the company earned more than $1 million and paid beyond $768,000 in wages. The PPP-loan application included phony payroll records for employees — and counterfeit tax forms.
Harris obtained more than $129,000 in a PPP loan from an approved lender. And in 2021, he did it again with the same fake documents and received the same amount in a PPP loan from a different lender, according to the factual statement signed by the defendant, his attorney and prosecutors with the U.S. Attorney’s Office.
While prosecutors didn’t give specifics about this case, borrowers accused of exploiting the pandemic relief programs typically got quick loan approvals from banks and other financial institutions because of the emergency to push money out the door to stimulate the economy. But ultimately, many got caught because their fraudulent loan applications didn’t match up with their prior corporate records, employee payrolls and tax returns, according to authorities.
In addition, their conspicuous bank withdrawals and irregular spending drew the attention of financial institutions, which then alerted investigators such as local police, the FBI and Homeland Security Investigations.
South Florida a hotbed of cases
South Florida, long known as the nation’s capital of fraud schemes, has incurred more than 150 PPP criminal cases involving about 200 defendants over the past three years, according to the U.S. Attorney’s Office.
In July, a former detention guard for Immigration and Customs Enforcement was charged with submitting falsified applications for COVID-19 relief loans. Federal prosecutors alleged Anthony Faustin, 28, submitted a series of loan applications for six fake business owners, obtaining more than $100,000 from lenders. In September, Faustin pleaded guilty to conspiracy to commit wire fraud and identity theft.
And in June, former Miami-Dade police officer Samuel Harris, 43, pleaded guilty to wire fraud, admitting he revived a dead company and used it as a vessel to obtain more than $275,000 in pandemic relief loans. He awaits sentencing in November.