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Texas Man Charged In $5 Million PPP Loan Fraud Case

A Texas resident, 32-year-old Samuel Yates, was charged with allegedly trying to file fraudulent bank applications for over $5 million in loans related to COVID-19 relief, according to a press release Friday (Jan. 15) from the Department of Justice.

According to the release, Yates reportedly sought out millions in forgivable loans from two separate banks under the provisions of the CARES Act’s help for small businesses in the Paycheck Protection Program (PPP), allegedly claiming he had over 400 employees earning wages. In reality, he had zero employees for the business he claimed to run, the release said. In a second application, he allegedly claimed to employee more than 100 and obtained a loan for $500,000.

Yates allegedly submitted a list of the purported employees with the applications, which he had obtained from a random name generator on the internet, the release said. He also allegedly submitted fake tax documents with both applications. Yates was charged with two counts of wire fraud.

The PPP loan program was introduced as part of the CARES Act passed last year, right after the pandemic began. It was intended to help qualifying small businesses with applying for loans to help them stay afloat during lockdowns and restrictions related to the pandemic.

However, it became apparent that large publicly-owned corporations had used the program to get funds even though they didn’t need them.

There has also been an abundance of fraud connected to the coronavirus, including other such scams where people would make up fake businesses to access relief money. Last year, PYMNTS reported hundreds of probes being opened into fraud associated with the PPP program. According to the probes, the problems were wide-ranging, from forged companies getting money to companies receiving aid despite having more than 500 workers and companies that got money even though they were prohibited due to owing debts to the government.

The Department of the Treasury, according to reports, received more than double the amount of suspicious activity reports related to loans that it would get in a normal year.

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