US authorities have charged a Texas man named Samuel Yates with fraudulent filing of bank loan applications to gain over $5 million dollars in forgivable loans through the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
The US government designed the CARES Act to provide emergency financial assistance to citizens affected financially by the pandemic. One provision under the act is to authorize forgivable loans to small businesses through the Paycheck Protection Program (PPP). Loans can be forgiven if the money is spent on defined expenses, with at least 75% being used for payroll costs, within eight weeks of receipt.
Yates sought millions of dollars from two different lenders under the SBA for COVID-19 relief through the PPP. He falsely claimed to have over 400 employees in one application and over 100 employees for another. In reality, Yates’ alleged business employs no individuals. He submitted a list of alleged employees created using an online random name generator. Additionally, he used forged tax documents to complete his applications.