As a result of COVID 19, there are lots of relief funds, loans available to Americans. Paycheck Protection Program PPP is one of them. It is part of the Cares Act COVID-19 funding package.
This PPP is targeted at small business owners who are impacted by the pandemic. This loan is forgivable and beneficiaries can enjoy it twice; first, draw and second draw. A lot of small businesses in America enjoyed the PPP loan including Lola Shalewa Barbara Kasali, a Houston businesswoman. The program has issued more than $634.4 billion in loans.
Paycheck Protection Program Fraud
More than 150 defendants in more than 95 criminal have been prosecuted. More than $75 million in fraudulently obtained PPP funds have been seized. Real estate properties and luxury items bought have been confiscated.
The Justice Department believes that a lot of people are involved in PPP Fraud by submitting false information, false certifications, filling the form under a disguise, spending the fund outside the specified use.
The Justice Department is committed to prosecuting offenders which is why they convicted Houston-based hair extension entrepreneur; Lola Shalewa Barbara Kasali who applied to get more than $4 million in debt.
The Case of Lola Shalewa Barbara Kasali
A jury determined that Lola’s application was fraudulent. When this aid started, lots of businesses applied including Lola who filed her application twice. She was convicted on Wednesday by a federal jury of 4 counts. 2 counts of making false statements to a financial institution and 2 counts of bank fraud concerning Paycheck Protection Program loans.
Lola in June 2020 claimed she had 2 extensions of her business which each had monthly payroll expenses of $775,000 and $750,000. Lola was also able to provide tax records to back up her claim. Prosecutors presented evidence that there were no employees at these businesses except Lola herself. The $1.9 million funds she got have been withdrawn by the Justice Department. Lola’s sentencing is scheduled for February 25, 2022.
In defense, by Lola’s defense attorney; there was no proof that her client personally applied. Someone must have used Kasali’s identity to file for the applications. Therefore there will be a file for an appeal.
Beware of PPP Loan Scams
On the Small Business Administration SBA Website, they mentioned the possibilities of stolen identity and how to combat it.
They warned that Fraudsters might send emails using the SBA domain, they may come offering a guarantee of securing the loan in exchange for an upfront payment, they might use phishing using the SBA logo to access people’s devices and steal important information. Report fraud immediately, especially if you discover that your information is already used not by you.
Who can benefit from the PPP Loan?
PPP loans have an interest rate of 1%. Maturity rate of between 2-5 years depending on when it is issued to the beneficiary. No personal guarantees or collateral is required, borrowers can apply for loan forgiveness.
Independent contractors, sole proprietors, and self-employed persons who are affected by the Covid 19 can benefit from this PPP Loan. Any small business with less than 500 employees, non-profit organizations, veteran organizations, or tribal business concerns, any business with NAISC code that begins with 72.