More PPP loan fraud by Cook County employees uncovered, some fired, watchdog reports
An independent watchdog has singled out more Cook County employees who fraudulently applied for pandemic relief, recommending firings in each case for violation of county rules around conduct and reporting of outside jobs.
It’s the latest in an ongoing investigation by the county’s Office of the Independent Inspector General to determine whether county workers who applied for federal Paycheck Protection Program loans were violating any personnel rules. In all, the OIIG’s office has released more than a dozen findings of violations of such rules since July, as well as evidence of fraudulent applications and misspent funds.
The PPP program gave out hundreds of billions of dollars in forgivable loans to be used to keep businesses afloat during the early months of the COVID-19 pandemic, but it has been rife with fraud nationally.
As of last month, the Justice Department’s Fraud Section had prosecuted roughly 200 defendants in more than 120 criminal cases, seizing “over $78 million in cash proceeds derived from fraudulently obtained PPP funds, as well as numerous real estate properties and luxury items purchased with such proceeds,” according to a release.
But that’s a drop in the bucket compared with the $80 billion some experts estimate was stolen from the program nationally.
The Chicago Housing Authority identified 16 employees last summer who had obtained fraudulent loans. Chief Judge Timothy Evans has hired an outside law firm to investigate whether his employees took part in PPP loan fraud, the Sun-Times reported last month. Sheriff Tom Dart’s office also “identified more than a dozen individuals in custody” in 2022 who received large influxes of funds that “could be a potential misuse,” of PPP funds and referred the issue to the FBI, spokesman Matthew Walberg told the Tribune last month.
In a July 2022 report, former Independent Inspector General Pat Blanchard recommended four employees be terminated and barred from working for the county again for fraudulent applications or violation of county rules. Together, those loans accounted for roughly $120,000. The OIIG’s office said it had been in contact with federal and state officials about its findings.
Blanchard has since stepped down from the post, but investigations have continued under interim IG Steven Cyranoski.
In the office’s latest report, the IG recommended termination for four more employees in the county’s Bureau of Technology, assessor’s office, Board of Review and in the secretary of the Board’s office. Combined, the employees received more than $100,000 in PPP loans.
The report also said three other employees in the office recommended for termination in earlier reports had indeed been let go.
None of the workers has been named, which is a standing policy of the office.
Of the new cases in the report released Thursday, an unnamed employee at the Bureau of Technology got a PPP loan of nearly $20,000 for claiming he was the “sole proprietor” of a taxi and limousine service.
But the OIIG investigation proved “he provided false and misleading information about his stated business” and how much revenue it made, the report said. That employee spent the loan money on his home mortgage and credit debts, which “tarnishes the BOT employee’s reputation and brings discredit to the County.”
That employee refused to turn over certain documents to the IG’s office, including the tax return he used to support his PPP loan, the report said, and also lied “in response to several questions at his OIIG interview” about who prepared his loan application. The IG concluded the employee engaged in “conduct unbecoming” and also violated a county rule requiring workers to report outside employment. The IG recommended the employee be fired. The Bureau of Technology is “seeking termination … through the disciplinary process,” the report says.
Another unnamed employee working in the secretary of the county board’s office violated the same rule when she applied for a nearly $21,000 PPP loan to support her business. She “falsely stated” on her loan application her business earned gross receipts of more than $125,000 in 2020 to “maximize the federal dollars available to her.”
She had failed to disclose her outside job and used a county laptop “to conduct her real estate management business,” both violations of personnel rules. The IG recommended she be fired and placed on the county’s do not hire list. The recommendation is pending.
An assessor’s office employee was also found to be in violation of the county’s rules and recommended for firing after she admitted to signing a PPP loan application that falsely stated she owned a business that had gross receipts of about $105,000. “She further admitted that information was submitted for the purposes of obtaining” about $21,000 in government funds “which she then spent on personal expenses,” according to the report.
The unnamed employee is a manager whose “conduct in obtaining the loan” happened during working hours. The IG’s recommendation for termination is pending.
An employee at the county’s Board of Review was fired in November after the OIIG found he had applied for two PPP loans and received one. The employee “submitted a fictitious bank statement,” and the IG found the funds “were not expended in conjunction” with the barber business described in the loan application.
The IG also reported updates to previous findings of PPP loans to county employees: the Bureau of Technology fired an employee who had lied about earnings from a catering business in a PPP loan application in which he received nearly $21,000.
The Board of Review also fired an employee who spent some of a PPP loan awarded to his business as an “independent contractor” on luxury clothing, dinners, hotel stays and a trip to Miami unrelated to his purported business.
The assessor’s office also fired a “high-ranking” human resources manager who received a $20,625 PPP loan as the “sole proprietor” of a personal training business, but had included her county salary as revenue in her loan application and hadn’t reported an outside job to county officials.
