Palm Beach County State Attorney Dave Aronberg announced on Wednesday that his office has created a new task force to investigate and prosecute people who defrauded the federal paycheck protection program. The new PPP fraud task force will work with the Palm Beach County Sheriff's Office to investigate PPP fraud at the local level, dedicating four investigators from the Sober Homes Task Force and two additional investigators to the effort.
The PPP and Economic Injury Disaster Loan (EIDL) were two programs created through the CARES Act at the onset of the COVID pandemic. Business owners could apply for PPP loans to cover payroll expenses, interest on mortgages and rent and utilities. The program allowed the interest and principal to be forgiven if the money was spent on certain items within a designated time frame and if a designated percentage went toward payroll expenses, according to the Department of Justice.
The federal government has prosecuted PPP fraud cases in South Florida and other judicial circuits across the country, but Aronberg said the cases are too many for them to handle alone.
Aronberg cited a study by University of Texas at Austin researchers who identified 1.41 million loans as suspicious. As of last March, the Department of Justice had published 258 criminal complaints pertaining to just 502 loans, the study said.
The federal government is handing over 12 existing cases to the new task force, freeing up federal resources to take on more. The cases taken on by the task force will be prosecuted in state court.
The task force will be looking for more tips and actively investigating leads as they come in. Aronberg says that, in the coming months, residents in Palm Beach County will see dozens of these cases being prosecuted here locally.
The lead investigator of the PPP Fraud Task Force and Sober Homes Task Force said investigators expect to bring charges of scheme to defraud, grand theft and money laundering.
There has been a significant amount of PPP fraud discovered in overlapping investigations of illegal activity within local sober homes. In every open investigation pertaining to the drug treatment industry, investigators have seen COVID loans in accounts suspected of fraudulent activity.
Task force members have already worked on cases that have led to an arrest, like in the case of a Boynton Beach man who was given $441,000 in PPP loans by claiming his business had 35 employees, but investigators found he didn't have a business. Two days after the PPP money was disbursed, the man withdrew almost $250,000 of it and used the money to travel and bought jewelry, groceries and meals.