HOUSTON – A Houston man pleaded guilty to fraudulently obtaining $ 1.6 million in paycheck protection program loans. This is one of the many cases of PPP fraud that left some business owners in need of money without a chance.
“Looks like you already got a loan. I said no. I said you looked like you were on your second round to get a second loan. And I was like, you’re serious. ? ” said business owner Sharae Young.
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Young says she learned that someone had taken out $ 40,000 in PPP loans on her behalf, preventing her from obtaining a loan for her wine and marketing businesses and charities.
âSomeone like me who really needed the funds at the time and couldn’t get the funds. I had to go and take some money out of my savings,â Young said.
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The US Department of Justice said it has prosecuted more than 100 defendants for fraudulent PPP loans.
The DOJ said Lee Price, 30, of Houston, pleaded guilty to fraudulently obtaining $ 1.6 million in PPP loans, using the name of a deceased person, and purchasing a Lamborghini Urus, a Ford F-350 and a Rolex with the proceeds.
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A report from the University of Texas suggests that one in six PPP loans are suspect. But the Small Business Administration says the number is much lower.
âIn the case of PPP, it’s less than half a percent of loans that we even suspect to be ineligible,â said Tim Jeffcoat, district manager of the Houston SBA office.
Jeffcoat says the vast majority of PPP loans help legitimate businesses.
âHere in Houston, we were making an average of about 1,300 small business P3 loans per day, about $ 85 million, every business day during COVID. So there were 350,000 businesses, give or take, that got these. ready, âJeffcoat explained.
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In the meantime, Young says the SBA Inspector General’s office removed one of the loans from her credit report and is waiting for the second to be removed. She says it took months of work to clean up and lock in her credit.
“I had to write to the three credit bureaus and lock my accounts. Every time something happens, I get an email or an alert on my phone, informing me that someone is trying to do something.” Young said.
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The PPP loan program has ended, but Jeffcoat says 67% of those loans have already been canceled and the remaining 33% of beneficiaries can still request cancellation through the SBA’s new PPP Director Borrower Forgiveness Portal.
The SBA writes: âIn less than 45 days, 91% of all loans eligible for direct remittance in the PPP 2020 portfolio were submitted, demonstrating the effectiveness of the SBA in bringing relief to entrepreneurs who have suffered the most. of the pandemic. The number of lenders participating in Direct Pardon has more than doubled, from 600 when the portal opened to more than 1,400 today. ”
Businesses in need can apply for economic disaster loans from the SBA and grants from the following businesses:
Harris County Small Business Grant Clawback Program 2021 (harriscountybusinessrelief.org)
EVOLVE – TruFund
Small Business GrantCovid-19 Assistance Programs (powerappsportals.us)
To be hired! | Fort Bend Economic Development Council (fortbendcounty.com)
KKR Small Business Builders (helloalice.com)
Fundraising by GoFundMe.org: Small Business Support Fund
The fund of bar stools | Sport bar stool
TikTok and HHF Announce “Creciendo con TikTok” to Help Latinx Business Owners Across the Country – Hispanic Heritage Foundation
Local community grants (walmart.org)
The DOJ asks anyone with information about PPP fraud to report it to the Department of Justice’s National Disaster Fraud Enforcement Center hotline at (866) 720-5721 or via the NCDF online complaint form.