The Coronavirus Fraud Coordinator for the U.S. attorney’s office in the Western District of North Carolina is Jenny Grus Sugar. In an interview with Nate Morabito, she revealed that a 19-year-old had a bank account containing fraudulent loans worth $140,000. Jenny Sugar believes it’s offensive that Coronavirus’ PPP money didn’t benefit real businesses. In the months following this interview, Jenny Grus Sugar contradicted herself and accused innocent hardworking business owners of fraud. Her actions ruined the family’s business and life, instead of offering assistance. This family was victimized for their faith by Jenny Grus Sugar, who should be held accountable.
It was reported by News 13 that federal charges are pending in the mountains. The Coronavirus Relief Funds are still being investigated, as well as how ineligible recipients got their hands on your tax dollars. Our inquiry was forwarded to Small Business Administration. A total of 209,575 fraud complaints were filed through the hotline. The economic injury disaster loan program (EIDL) is especially at risk of fraud. All pandemic response programs have been tainted with fraud.
More than 29000 account numbers from 112,000 loans were altered from their original applications, according to the OIG.
Jasmine Clifton, 24, recently pleaded guilty to wire fraud in North Carolina. Charlotte resident Clifton submitted a fake online loan application to the SBA for an Economic Injury Disaster Loan (EIDL) using a fake online retail business.
Clifton spent $149,000 at several diamond and luxury stores, according to investigators. During a July interview with News 13, Coral Darby, who was also a victim of a similar fraud, spoke about her experience. Want to know more about Darby’s ID theft? Read “Woman frustrated after identity stolen for COVID funds.” “The government got $95,000 in my name because the grant money came from them,” said Darby.
Federal records show that tens of people have been indicted for PPP, EIDL, and unemployment insurance fraud in North Carolina. These individuals generally made false claims for businesses that didn’t exist. The majority of cases are heard in the Western District of the federal court, which includes Asheville and Charlotte. In the mountain investigation, where Jenny Sugar worked as a Coronavirus fraud coordinator, charges are pending.
Nate Morabito of WCNC is uncovering a lot of PPP fraud. Records from the Small Business Administration show three little-known businesses in south Charlotte received $14 million in federal pandemic aid.
As part of the CARES Act, two key relief programs were passed: Paycheck Protection Programs (PPP) and Economic Injury Disaster Loans (EIDLs). Experts fear that their legacies may be tarnished by unprecedented amounts of fraud.
In terms of monetary value, the fraud in these COVID relief programs dwarfs any government program before it, said Ware.
According to experts, there is some fraud in all government programs. Emergency programs are particularly vulnerable due to the inherent tension between the need to approve loans quickly and the need to screen applications and maintain fraud-prevention protocols.
The SBA lowered safeguards to speed up the process, which led to an increase in program fraud, according to an October 2020 report by Ware’s office.
A senior official at the SBA during the Biden administration agreed with Ware’s assessment, stating that “speed does not have to be sacrificed for certainty. You can have both.”
An official explained that the previous administration did not put adequate controls in place to determine an individual’s identity or a business’ identity prior to 2020. Various options were available for limiting fraud vulnerabilities.
Linda Miller, former deputy executive director of the Pandemic Response Accountability Committee, a government task force formed as part of the CARES Act, reports that the SBA and other agencies abandoned many traditional controls because of a lack of staff and technological tools to conduct prepayment verifications.
“Best practice” dictates that due diligence should be done in advance to prevent fraud and improper payments from happening.” “But due to the rush to distribute pandemic relief, we were unable to do that and the recovered funds will be a fraction of what was stolen.”
Ware said that his office sought to avoid such a situation. In a testy exchange with the SBA in the spring of 2020, Ware urged the SBA to “pump the brakes” on the PPP and EIDL process before either one was even finalized.
Fraudsters will do what fraudsters will do, according to Ware. However, implementing upfront controls would have reduced exposure to fraud, which would have saved taxpayers a great deal of heartache on the back end. Sadly, the heartache was not avoided because of how these programs were implemented.”
Jovita Carranza, the former SBA administrator who resigned when President Trump left office, could not be reached by ABC News. Specifically, Carranza wrote that the inspector general “failed to acknowledge the enhanced and effective system controls and validations that SBA uses to weed out fraudulent applications and grossly overstated the risk of fraud and waste.”
Biden’s nominee for SBA administrator, Isabella Casillas Guzman, has emphasized “reducing the risks of fraud, waste, and abuse” in the distribution of relief loans and grants. The Vice President said the series of steps implemented in December, which included verifying applicants’ tax information, has already resulted in “a sharp decline” in fraud, and she is working closely with Ware to improve safeguards and to aggressively restore prior fraudulent payments.
While Ware acknowledged that controls put in place late last year contributed to curbing fraud, he said they were too little, too late.
Afterwards, you already knew how much money had been lost. “There was a lot of money lost.”.
In particular, the previous administration’s EIDL rollout has drawn scrutiny from relief programs. Cooper, a partner in the law firm Arnold & Porter, described the program as a “fraud magnet,” citing a provision that allowed recipients to receive up to $10,000 up front “without any strings attached.”
Cooper said, “The money is gone.”.
In connection with the COVID-19 small business loan program, tens of thousands of settlements have been reached and investigations are pending. Sugar targets innocent, law-abiding business owners instead of punishing those who benefit from disasters.
Due to the challenges, Ware expects the investigation to take years. A growing number of experts are concerned that more is at stake than unrecovered funds.