Fraud Friday — Texas Man Submits Over 400 Fake Employee Names on PPP Application

May 29, 2020

By Caity Witucki
Contributing Editor, Fraud Friday

Fraud Friday — Texas Man Submits Over 400 Fake Employee Names on PPP Application

Last week, Texas resident, Samuel Yates, was arrested on Paycheck Protection Program (PPP) loan fraud charges. Prosecutors allege that Yates sought millions of dollars in forgivable loans guaranteed by the SBA from two different banks by claiming to have over 400 employees earning wages when, in fact, no employees worked for his purported business.

According to court documents, Yates allegedly submitted fraudulent applications to two different lenders for loans guaranteed by the SBA for COVID-19 relief.  In an application submitted to one of the lenders, Yates allegedly sought $5 million in PPP loan proceeds by fraudulently claiming to have 400 employees with an average monthly payroll of $2 million.  When his loan was denied, he submitted another loan application to a different borrower. Prosecutors say Yates’ second fraudulent application was accepted and that he received $500,000.  

To support both applications, court documents suggest that Yates submitted a list of purported employees that he obtained from a publicly available random name generator on the internet.  He also submitted forged tax documents with each application.

“This defendant allegedly sought to steal millions of dollars in loans intended to aid legitimate small businesses grappling with the economic effects of COVID-19,” says Assistant Attorney General, Brian Benczkowski of the Justice Department’s Criminal Division. “The department and our law enforcement partners will use all the tools at our disposal to investigate and prosecute frauds against the Paycheck Protection Program.”

The federal criminal complaint charges Yates with wire fraud, bank fraud, false statements to a financial institution, and false statements to the SBA. A federal criminal complaint is merely an accusation and Yates is presumed innocent unless and until proven guilty.

Sources:
Department of Justice