If you’ve been paying attention to the PPP program over the last couple of years when the Small Business Administration created the program to help millions of businesses, you might have anticipated some of the fraud cases now reaching resolutions for criminal charges. One of those cases recently concluded was that of 40-year-old Tristan Bishop Pan of North Carolina. According to the Department of Justice, he submitted numerous fraudulent PPP loan applications to federally insured banks, including on behalf of entities named White Walker, Khaleesi, and The Night’s Watch, which are characters or groups from the show Game of Thrones.
Mr. Pan was obviously a big fan of the hit HBO TV series that ended before the pandemic lockdowns. Unfortunately for him, being a fan doesn't prevent you from receiving 20 months in federal prison.
The wave of other convictions and judgments recently means that, just as in the Game Of Thrones, winter is coming for PPP fraudsters.
In the show, the phrase was used to mean troubled times were ahead in the winter, although there were seemingly always troubles. Well PPP fraudsters have been getting caught and prosecuted but the pace has picked up while cases wind their way through the courts. Some other recent cases include:
This last one involving HPM Corporation, a Department of Energy contractor, is particularly interesting in that it's the first case I’ve seen regarding false statements when applying for PPP ‘loan forgiveness’, which in this case was $1,344,700. The owners of HPM falsely stated that the PPP loan proceeds had been used for payroll and other eligible expenses when they had not been, according to the DOJ. They ended up settling for double the amount that they received plus another $250,000 fine.
Here's why there are more troubled times ahead for those who took out or sought loan forgiveness for PPP loans under fraudulent circumstances.
On March 1st of this year, the White House announced, “The Department of Justice’s (DOJ) COVID-19 Fraud Enforcement Task Force will expand its already robust efforts by appointing a Chief Prosecutor to lead teams of specialized prosecutors and agents focusing on major targets of pandemic fraud, such as those committing large-scale identity theft, including foreign-based actors. These strike force teams will also use state-of-the-art data analytics tools to connect the dots on identity theft and other complex fraud schemes committed across state lines or transnationally, as well as investigate major cases of criminal fraud in programs like the Paycheck Protection Program (PPP) and Unemployment Insurance (UI).”
It will be interesting to see in the coming months the number of cases that get
prosecuted.
The DOJ has already been aggressive in its pursuit of justice against those who tried to
beat the system. Millions have been lost to fraudsters but most would assume millions
more in fraud unaccounted for.
To the perpetrators, the DOJ is essentially telling you that winter is coming.