January 24, 2022

News

News Network

Arkansas Project Manager Pleads Guilty to Bank Fraud and False Statements in Connection with COVID-Relief Fraud

8 min read
<div>A project manager employed by a major retailer has pleaded guilty to bank fraud charges for filing fraudulent bank loan applications seeking more than $8 million in forgivable Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.</div>

A project manager employed by a major retailer has pleaded guilty to bank fraud charges for filing fraudulent bank loan applications seeking more than $8 million in forgivable Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division, U.S. Attorney Trent Shores for the Northern District of Oklahoma, Acting Deputy Inspector General Richard Parker of the Federal Housing Finance Agency Office of Inspector General (FHFA OIG), Inspector General Jay N. Lerner of the Federal Deposit Insurance Corporation (FDIC) OIG and Inspector General Hannibal “Mike” Ware of the SBA OIG made the announcement.   

Benjamin Hayford, 32, of Centerton, Arkansas, pleaded guilty to one count of bank fraud and four counts of false statements to a financial institution before U.S. District Judge Claire V. Eagan of the Northern District of Oklahoma.  Sentencing has been scheduled for Nov. 4 before Judge Eagan. 

As part of his guilty plea, Hayford admitted that he sought millions of dollars in forgivable PPP loans from multiple banks by claiming fictitious payroll expenses.  To support his applications, Hayford provided lenders with fraudulent payroll documentation purporting to establish payroll expenses that were, in fact, non-existent.  In addition, Hayford admitted to making false representations to a financial institution concerning the date that a Limited Liability Partnership for which he applied for relief was established. 

The CARES Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic.  One source of relief provided by the CARES Act was the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses, through the PPP.  In April 2020, Congress authorized over $300 billion in additional PPP funding.

The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1 percent.  PPP loan proceeds must be used by businesses on payroll costs, interest on mortgages, rent, and utilities.  The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set period and use a certain percentage of the loan towards payroll expenses. 

This case was investigated by the FHFA OIG, FDIC OIG, and SBA OIG.  Deputy Chief Brian R. Young of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Victor A.S. Régal for the Northern District of Oklahoma are prosecuting the case.  The U.S. Attorney’s Office for the Western District of Arkansas provided valuable assistance in this matter.  

The year 2020 marks the 150th anniversary of the Department of Justice.  Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.

News Network

  • Five Individuals Charged with Money Laundering in Connection with Alleged Venezuela Bribery Scheme
    In Crime News
    A federal grand jury in the Southern District of Florida returned an indictment on Oct. 7, which was unsealed today, charging three Colombian nationals and two Venezuelan nationals for their alleged roles in laundering the proceeds of contracts to provide food and medicine to Venezuela that were obtained through bribes.
    [Read More…]
  • Man Charged with $1.9 Million COVID-Relief Fraud
    In Crime News
    A Nevada man was charged in an indictment Wednesday for his alleged participation in a scheme to defraud multiple financial institutions by filing bank loan applications that fraudulently sought more than $1.9 million dollars in forgivable loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
    [Read More…]
  • Nepali Constitution Day
    In Crime Control and Security News
    Antony J. Blinken, [Read More…]
  • Secretary Michael R. Pompeo And Indonesian Foreign Minister Retno Marsudi
    In Crime Control and Security News
    Michael R. Pompeo, [Read More…]
  • Attorney General Merrick B. Garland Delivers Remarks at the Investiture of Damian Williams
    In Crime News
    Good afternoon. Thank you, Jenn, for that generous introduction. I am so happy to be here today with you, Damian, Noah and August.
    [Read More…]
  • Virginia Man Sentenced for Role in Multimillion-Dollar Investment-Fraud Scheme
    In Crime News
    A Virginia man was sentenced today in the Eastern District of Virginia to 14 years in prison for his role in an investment fraud scheme in which he and his co-conspirators stole approximately $5.7 million from victim investors.
    [Read More…]
  • Small Business Administration: Steps Taken to Verify Tribal Recognition for 8(a) Program
    In U.S GAO News
    What GAO Found The U.S. Small Business Administration's (SBA) 8(a) Business Development program was created to help develop small businesses owned and controlled by socially and economically disadvantaged individuals and entities, including Indian tribes that are federally or state-recognized. The program provides such businesses with an opportunity to compete on an equal basis in the American economy. Specifically, businesses that participate in the 8(a) program can receive federal contracts that have been set aside for 8(a) program participants. According to SBA's standard operating procedures, for businesses seeking entry into the program based on association with a recognized Indian tribe, SBA's Business Opportunity Specialists (BOS) are responsible for verifying tribal recognition during the application process. The BOS determines whether the Indian tribe is recognized for SBA purposes based on a review of the business applicant's supporting evidence compared to tribal information maintained at the federal or state government levels. The Department of Interior, Bureau of Indian Affairs (BIA) publishes an annual list of all federally recognized Indian tribes. Additionally, some state governments publish information regarding the Indian tribes that they have recognized. GAO's analysis of application data for fiscal years 2018 through 2020 indicates that all but one of the 122 participating 8(a) businesses were associated with a recognized Indian tribe as claimed. As a result of this finding, SBA officials told GAO that SBA is initiating steps to terminate that one business's participation in the 8(a) program. Further, GAO's illustrative covert testing results demonstrated that SBA took steps to verify the recognition status of fictitious Indian tribes, despite not yet documenting formal procedures for verifying tribal recognition. Results from GAO's Evaluation of SBA's Verification of Tribal Recognition Why GAO Did This Study According to SBA officials, in fiscal year 2020, federal 8(a) contract obligations for the overall SBA 8(a) program totaled about $19.7 billion and 3,364 8(a) participants were awarded federal 8(a) contracts for the same period. Prior GAO and SBA Office of Inspector General (OIG) reports identified challenges regarding SBA's oversight of the 8(a) program. For example, in March 2021, the OIG reported that SBA had no formal procedures for verifying the tribal recognition status of Indian tribes associated with 8(a) applications, which SBA plans to address by December 2021. GAO was asked to evaluate the effectiveness of SBA's verification of the tribal recognition of the Indian tribe associated with 8(a) businesses applying to the program. This report addresses: (1) the extent to which business applicants certified to participate in the 8(a) program were associated with a recognized Indian tribe as claimed for fiscal years 2018 through 2020; and (2) what covert testing results demonstrated about SBA's verification of tribal recognition status in fiscal year 2021. GAO compared SBA's tribal name data to information maintained by the BIA and research GAO conducted previously. GAO also used covert tests to assess whether SBA took steps to verify tribal recognition of fictitious Indian tribes associated with GAO's fictitious applications. These tests were illustrative and cannot be generalized to all applications. For more information, contact Seto J. Bagdoyan at (202) 512-6722 or bagdoyans@gao.gov or James (Howard) Arp at (202) 512-6722 or arpj@gao.gov.
    [Read More…]
  • Justice Department Announces Results in Fight Against the Opioid Crisis Two Years after Launch of Operation S.O.S.
    In Crime News
    In July 2018, the Department of Justice announced the launch of Operation Synthetic Opioid Surge (S.O.S), a program aimed at reducing the supply of synthetic opioids in 10 high impact areas and identifying wholesale distribution networks and international and domestic suppliers.
    [Read More…]
  • National Weather Service: Reform Efforts Could Benefit from Additional Actions and Continued Attention
    In U.S GAO News
    What GAO Found The Department of Commerce's National Weather Service (NWS) initiated the Evolve Program in 2017 to carry out a series of agency reforms to help achieve its strategic vision of strengthening the nation's readiness for and response to extreme weather events. The program has 20 reform initiatives, in varying stages of completeness, that are intended to free up staff time and improve service to the agency's partners (e.g., state emergency managers), among other things. In September 2021, GAO found that NWS has substantially followed five of the eight leading practices for effective agency reforms that GAO examined. Extent to Which NWS Has Followed Selected Leading Practices for Effective Agency Reforms Practice Extent followed Establishing goals and outcomes ◒ Involving employees and key stakeholders ◒ Using data and evidence ● Addressing fragmentation, overlap, and duplication ● Leadership focus and attention ◒ Managing and monitoring ● Strategic workforce planning ● Employee performance management ● Legend: ● Substantially followed —NWS took actions that addressed most or all aspects of the selected key questions GAO examined for the practice. ◒ Partially followed —NWS took actions that addressed some, but not most, aspects of the selected key questions GAO examined for the practice. Source: GAO analysis of National Weather Service (NWS) documents and interviews with NWS officials. | GAO-22-105449 However, there are gaps in the extent to which the agency has followed the other three leading practices. For example, in the area of leadership focus and attention, NWS has designated three leadership positions as having primary responsibility for leading the implementation of the reforms under the Evolve Program. However, the agency has not established a dedicated implementation team with the capacity to manage the reform process. Instead, the agency has primarily relied on rotating leaders and part-time staff for the Evolve Program, an approach that has not provided adequate leadership continuity, staff continuity, or staff resources for the program. By revising its approach to staffing the Evolve Program and addressing the other gaps, as GAO recommended in September 2021, NWS would have better assurance its reform efforts will succeed. The agency also faces staffing challenges that could affect its reform efforts. In its 2019 strategic human capital plan, NWS highlighted challenges related to staffing levels, vacancies, and hiring that could affect the agency's resources and capacity to implement its proposed reforms. These are long-standing issues that have been highlighted in previous studies, including a May 2017 GAO report. In September 2021, GAO found that these challenges continue. Continued attention to addressing these staffing challenges could help to reduce the risk that they will impede the agency's reform efforts. Why GAO Did This Study Extreme weather events, such as tornadoes and hurricanes, can devastate communities across the United States. NWS plays a critical role in the nation's efforts to prepare for and respond to such events, including by developing weather forecasts and issuing warnings to help protect life and property. NWS has determined that it needs to reform its operations and workforce to effectively carry out its responsibilities and to improve its provision of services to emergency managers and other partners. This testimony discusses (1) the extent to which NWS has followed selected leading practices for effective agency reforms and (2) staffing challenges NWS faces as it pursues its reform efforts. The testimony is based on a report GAO issued in September 2021, GAO-21-103792, on the agency's reform efforts, as well as previous GAO work on NWS from May 2017 and January 2020.
    [Read More…]
  • Puerto Rico Legislator and Two Capitol Employees Indicted for Theft and Bribery
    In Crime News
    On Wednesday, a federal grand jury in the District of Puerto Rico returned an eight-count indictment against legislator Nelson Del Valle Colon (Del Valle), a member of the Puerto Rico House of Representatives, as well as two of his employees, Nickolle Santos-Estrada (Santos) and her mother Mildred Estrada-Rojas (Estrada), for their alleged participation in a multi-year theft, bribery, and kickback conspiracy.
    [Read More…]
  • Panama
    In Travel
    I am a… [Read More…]
  • Registered Child Sex Offender Sentenced for Sexual Exploitation of Children and Possession of Child Pornography
    In Crime News
    A Vermont man was sentenced today to 200 months, or more than 16 years, in prison followed by 15 years of supervised release for the sexual exploitation of children and possessing child pornography. As part of his sentence, he will also pay $37,199.00 in restitution.
    [Read More…]
  • Chief Operating Officer of Network Security Company Charged with Cyberattack on Medical Center
    In Crime News
    A Georgia man was arraigned today on charges arising out of a cyberattack conducted on Gwinnett Medical Center in 2018.
    [Read More…]
  • U.S. Imposes Sanctions on People’s Republic of China Officials Engaged in Coercive Influence Activities
    In Crime Control and Security News
    Michael R. Pompeo, [Read More…]
  • Federal Hiring: OPM Should Collect and Share COVID-19 Lessons Learned to Inform Hiring During Future Emergencies
    In U.S GAO News
    What GAO Found The CARES Act provided temporary hiring authorities to six agencies with responsibilities for responding to the public health and economic crisis caused by COVID-19. A hiring authority is the law, executive order, or regulation that allows an agency to hire a person into the federal civil service. In addition, as of September 30, 2020, five agencies received direct hiring authority (DHA) from the Office of Personnel Management (OPM) in response to the pandemic. DHAs allow agencies to expedite hiring by eliminating competitive rating and ranking procedures and veterans' preference for specific positions. Also, in March 2020, OPM authorized the use of COVID-19 Schedule A hiring authority, which allows agencies to fill positions for up to 1 year as needed in response to, or as a result of, COVID-19. GAO found that the number of staff hired by 10 selected agencies using these three temporary COVID-19 hiring authorities varied. Figure 1: Availability of COVID-19 Hiring Authorities and Total Number of Hires Made at Selected Agencies, March through December 2020 aCOVID-19 Schedule A hiring authority allows agencies to fill positions for up to 1 year as needed in response to, or as a result of, COVID-19. bAgency received approval to amend an existing authority so hires were not all related to COVID-19. cCommerce's CARES Act hiring authority is limited to the Economic Development Administration. The selected agencies described a few lessons learned that could help other agencies improve the use of hiring authorities in future emergencies including: (1) collaborating with internal stakeholders to maximize information sharing across the agency; and (2) creating an inventory of hiring needs and available authorities to assist in addressing agency workforce needs. OPM intends to conduct reviews in fiscal year 2022 that may provide insight into agencies' use of hiring authorities in response to the pandemic. However, according to OPM officials, the agency has not yet developed plans to collect and share lessons learned on the use of COVID-19 related hiring authorities. Collecting and sharing lessons learned would help OPM understand how the various hiring authorities could be used during future emergencies and identify opportunities to improve the hiring process. Why GAO Did This Study The COVID-19 pandemic has had far-reaching effects on federal programs and operations. To address this public health crisis, Congress and the administration made several hiring authorities available to agencies to hire staff with the needed skills to effectively respond to the pandemic. The CARES Act includes a provision for GAO to report on ongoing monitoring and oversight efforts related to the COVID-19 pandemic. This report examines: (1) the new hiring authorities provided to federal agencies for COVID-19 response and the extent to which selected agencies have used them; (2) selected agencies' experiences using those hiring authorities, including lessons learned; and (3) OPM's efforts to assess agencies' use of the COVID-19 related hiring authorities. GAO reviewed documents and interviewed officials from OPM and the 10 agencies that were provided hiring authorities in the CARES Act or DHA for the public health emergency from OPM between March 1 and September 30, 2020. The documents reviewed included data on the agencies' hiring and OPM policies and guidance for its oversight of agencies' use of hiring authorities.
    [Read More…]
  • Memphis Physicians Agree To Pay More Than $340,000 for Alleged Overbilling
    In Crime News
    Doctor Shoaib Qureshi, Doctor Imran Mirza, Memphis Primary Care Specialists, Lunceford Family Health Center, and Getwell Family Medicine agreed to pay $341,690 to resolve allegations that they violated the False Claims Act by knowingly charging Medicare for services rendered by nurse practitioners at the higher reimbursement rate for physician services, the Justice Department announced today.  
    [Read More…]
  • Joint Statement on the Situation in Libya
    In Crime Control and Security News
    Office of the [Read More…]
  • Upcoming Elections in Africa
    In Crime Control and Security News
    Michael R. Pompeo, [Read More…]
  • Israel, The West Bank and Gaza Travel Advisory
    In Travel
    Reconsider travel to [Read More…]
  • Federal Courts Participate in Audio Livestream Pilot
    In U.S Courts
    Thirteen district courts around the country will livestream audio of select proceedings in civil cases of public interest next year as part of a two-year pilot program.
    [Read More…]

Crime

Network News © 2005 Area.Control.Network™ All rights reserved.