900 criminal investigations opened, 100 stopped to date

LOUISVILLE, Ky. (WAVE) – Money is one of the main things businesses and people need to survive the pandemic.

Mohammed “Mo” Sloan is the CEO and Founder of EZ-Chow, a digital ordering company that gets rid of third parties for restaurants and hospitality organizations.

The PPP loan he obtained legally helped keep his business afloat during the pandemic.

“People have taken advantage of businesses, especially small businesses, by taking funds that weren’t required of them or not applicable to them,” Sloan said.

EZ-Chow serves more than 200 businesses across the county and has approximately seven employees. He was able to receive the PPP loan in both rounds.

“Any additional funding we can get helps tremendously,” Sloan said. “Was that enough?” Not really.”

Companies have walked away with billions of dollars in funding, however, some of these companies are not real.

Like Randall Blankenship, 49 fake payroll system with his Woodford County company who stole $1,323,829. The US Department of Justice said he faced 20 years in prison.

Karenda Vaughn of Laurel County also faces 22 years in prison for COVID fraud.

Dave Christopher is the founder of the Russell Tech Business Incubator and helps minority businesses overcome financial barriers.

“I’m not surprised…it was ripe for fraud,” Christopher said. “The system was set up for those who could figure out how to manipulate it. Businesses are in trouble and you hear the ordeal is coming and then the ordeal passes right by you.

Christopher said minority businesses were the most excluded from PPP loans because they didn’t have the structure ready.

Meanwhile, this week the Secret Service announced nearly $100 billion stolen from COVID relief funds and up to $400 billion stolen from unemployment programs.

The US Department of Labor reported that about $87 billion in unemployment benefits may have been paid improperly, most of it again linked to fraud.

“Waste and fraud hurt everyone in the end,” Sloan said.

The Small Business Association’s Southeast Region serves Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, and Tennessee. It has approved a total of over 53,000 PPP loans worth over $4 billion.

Nationally, more than 400,000 loans worth more than $35 billion have been approved for the January 2021 cycle. Overall, the average loan size is $87,000.

Combined, over 5.5 million PPP loans have been approved for a total of over $557.8 billion.

“It was set up so that people with power get more power,” Christopher said.

Christopher said there should have been different income levels to focus on helping small businesses. Ultimately, he said, people will always benefit from something that’s supposed to do good.

The Secret Service said there are currently 900 active criminal investigations into pandemic fraud. 100 people have been arrested so far.

Through financial institutions, the Secret Service said it was able to reverse some of the payouts. The Secret Service’s pandemic coordinator said any estimates revealed are conservative and they are still working to hold accountable those who lied and stole money.

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