The Department of Justice says it has charged dozens of people who allegedly tried to steal more than $175 million in federal aid meant to help small businesses during the COVID-19 pandemic.
In a press conference on Thursday, the Justice Department announced it has now charged 57 people with Paycheck Protection Program-related fraud since May — in addition to other cases brought by U.S. attorneys around the country.
Congress approved about $670 billion for the program, which allowed small businesses to seek forgivable loans in order to avoid layoffs and stay afloat during the pandemic. The Small Business Administration made 5.2 million loans, worth more than $525 billion through the program.
“Any time the federal government makes a large amount of money available to the public on an expedited basis, the opportunities for fraud are unfortunately clear,” said Brian Rabbitt, Acting Assistant Attorney of the Criminal Division.
Rabbitt said some of the people facing charges are individuals who lied about business needs in order to access money to spend on themselves.
“These defendants used lies to obtain millions of dollars in PPP funds and then spent those funds not on their workers, but on things like luxury cars, homes, renovations, diamond jewelry, even adult entertainment and trips to Las Vegas,” said Rabbitt.
The cases range from attempts to illegally access loans of just $30,000 to loans worth tens of millions of dollars. In addition to individual bad actors, Rabbitt said “coordinated criminal rings” took part in “systematic, organized conduct to loot the PPP.”
The Justice Department said law enforcement arrested defendants in Miami on Wednesday and Thursday who officials allege are involved in a “criminal ring” that attempted to steal $24 million in PPP funds.
According to the DOJ, Joshua Bellamy — an NFL player — was among those arrested and charged in connection to the alleged scheme. The Justice Department said Bellamy obtained a $1.2 million loan and bought more than $104,000 worth of luxury goods, spent nearly $63,000 at the Seminole Hard Rock Hotel and Casino and withdrew more than $302,0000.
Rabbitt told reporters a separate ring is accused of trying to steal $7.6 million. The attempts to steal more than $175 million resulted in actual losses of $70 million. The government has so far been able to recover more than $30 million.
“The pandemic presented a whole of government challenge and fraudsters were waiting in the wings to find vulnerabilities and schemes to bypass controls and gain access to the funds,” said Hannibal “Mike” Ware, the SBA Inspector General.
The Justice Department said it established a team designated to investigate potential fraud within the Paycheck Protection Program earlier this year — and warned more charges could be coming.
“There is more to come. Our work is ongoing. We are not done here yet,” said Rabbitt.
At the press conference on Thursday, the FBI said a PPP working group has opened several hundred PPP-related investigations and identified nearly 500 individuals believed to have fraudulently requested or received PPP loans. Rabbitt told reporters a “significant” amount of fraud is still ongoing and under investigation.
Last month, House Democrats found billions of dollars in questionable PPP loans. Democratic lawmakers warned that the program was at risk of fraud and urged the Trump administration to increase oversight.
Jessica Smith is a reporter for Yahoo Finance based in Washington, D.C. Follow her on Twitter at @JessicaASmith8.