A couple from Seattle have been indicted for carrying out over $1m in fraud on Covid-19 relief programs.
Brian Sparks, 40, and Autumn Luna, 22, are charged in a 16-count indictment with defrauding the Washington State Employment Security Division (ESD) of more than $500,000 in benefits and defrauding the Small Business Administration (SBA) of approximately $520,000.
As well as fraudulently claiming unemployment benefits with false bank accounts, the couple used stole identities to apply for loans, including Coronavirus Aid, Relief, and Economic Security (CARES) Act.
The SBA paid the couple around $520,000 in Economic Injury Disaster Loan (EIDL) proceeds.
Seattle Couple Indicted on COVID Business Loan Fraud Charges
The Small Business Administration has been committed to keeping small businesses afloat throughout the pandemic, with a range of financial relief plans. The Payment Protection Program (PPP) and the Economic Injury Disaster Loans (EDIL) have proved pivotal in protecting small businesses and jobs. Despite the businesses and jobs they have rescued, such support has been tarnished by “unprecedented” amounts of fraud.
‘Unprecedented’ Fraud at the SBA
As Mike Ware, inspector general of the SBA, told ABC News: “The magnitude of the fraud we are seeing is unheard of — unprecedented.
“In terms of the monetary value, the amount of fraud in these COVID relief programs is going to be larger than any government program that came before it,” Ware said.
The fraud case in Washington highlights the importance of honesty and transparency when applying for funding from the SBA.
Small businesses which knowingly make a false statement or information in order to be the recipient of an SBA loan can face a hefty fine, not to mention significant business reputational damage.
COVID-19 Fraud Enforcement Task
As a means of enhancing efforts to combat and prevent pandemic-related fraud, in May 2021, the Attorney General established a COVID-19 Fraud Enforcement Task to marshal the resources of the Department of Justice in partnership with agencies across government.
The Task Force bolsters efforts to investigate and prosecute fraudsters and assists agencies tasked with administering relief programs to prevent fraud.
The subject around fraud and SMA loans reiterates the importance for small businesses, not only to be entirely truthful when applying for loans, but to also be diligent and careful to avoid making mistakes on applications.
According to Rob Scott, Great Lakes regional administrator for the SBA, small businesses should do their homework and be prepared by having all the paperwork together and up to date when applying for an SBA loan.
“Any delay that a business owner has in getting their information to their lender so that their lender can turn around and put it into the SBA system is a delay you don’t want,” said Scott.
This article, “Seattle Couple Indicted on $1 Million COVID Business Loan Fraud Charges” was first published on Small Business Trends