Fraudsters Busted Trying to Buy Porsche With COVID Relief Funds
Seven men were charged after they attempted to use Paycheck Protection Program funds to buy Porsches and other sports cars.
Taking Advantage
With the COVID-19 pandemic wreaking havoc on small businesses, the federal government came up with the Paycheck Protection Program to help companies continue to pay their employees even with business in the gutter. But as is often the case with these sorts of government programs, quite a few folks took advantage of it and committed fraud. In fact, seven of them tried to use those funds to purchase some high-end sports cars, but were ultimately caught.
Photos: Porsche
Big Scheme
The seven men - one in Illinois and six in Texas - allegedly completed over 80 fraudulent loan applications to obtain $16 million in funds, according to KPRC Houston. They've been charged with conspiracy to commit wire fraud and wire fraud, with one of the men also charged with three counts of money laundering.
Photos: Porsche
Falsifying Information
The Paycheck Protection Program issues forgivable loans to businesses with the idea that they can then use that money to keep employees on the payroll and continue to operate amid various shutdowns and COVID-19 induced restrictions. Prosecutors say the men conspired to submit the fraudulent applications by falsifying the number of employees and average payroll expenses of their businesses.
Photos: Porsche
Third Parties
In addition, prosecutors say the men conspired to submit fraudulent bank records and federal tax forms. Several of the applications were submitted on behalf of third-party entities, while others were companies that the men allegedly owned. For the former, the defendants received large kickbacks from the business owners.
Photos: Porsche
Use of Funds
At least some of the $16 million in funds obtained by the men were used to buy a Porsche and a Lamborghini. The report doesn't say what types of cars were purchased or how many, but they have since been seized by federal prosecutors, which comes as no surprise.
Photos: Porsche
Going Further
And in case all of this wasn't enough, the fraud extends even further. The men cashed some of the PPP checks at their own businesses, and even wrote paychecks to fake employees, with some of their friends and relatives receiving those funds.
Photos: Porsche
Sure Sign
As far-reaching as this case is, it's really no surprise that prosecutors say that they've still got quite a bit of work to do to determine how far this fraud has truly spread. However, it's worth noting that folks who usually commit this type of fraud are often caught because they do dumb things like go out and buy fancy new cars immediately, which always raises questions about where that money suddenly came from.
Photos: Porsche
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