The Paycheck Protection Program (PPP) initially authorized up to $349 billion in forgivable loans to small businesses to pay their employees during the COVID-19 crisis. All loan terms were established to be the same for everyone. The loan amounts will be forgiven as long as:  The loan proceeds are used to cover payroll costs, rent, utility costs, and most mortgage interest over the 8 weeks after the loan is made; and employee and compensation levels are maintained.[1]

It did not take long for fraudsters to take advantage of the PPP because of their greed for money. Generally, the PPP was to benefit employers for an 8-week period.  It appears that shortcomings in the implementation allowed some unscrupulous individuals to take advantage of the program.  Individuals that lack integrity applied for and received PPP loans in violation of the SBA and U.S. Treasury rules.  

Recently, several prosecutions have been in the national news.  According to court documents unsealed Tuesday in the U.S. District Court in Texarkana, Texas, Samuel Yates has been charged for allegedly seeking more than $5 million in forgivable loans backed by the Small Business Administration under the CARES Act by claiming to have a business with more than 400 employees.[2]  Yates allegedly made two fraudulent applications to two different lenders for emergency Covid-19 relief loans through the Paycheck Protection Program (PPP).  Being a creative person, Yates used a random name generator on the internet to come up with a list of purported employees.

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