Illinois police have arrested 15 people after an investigation found they allegedly applied for and received multiple Paycheck Protection Program (PPP) loans, which they then used to bail themselves out of jail.
In total, 25 people were discovered to have been part of the alleged fraud, according to Fox 32 Chicago. At the time of the crime, they were facing felony charges and incarcerated. In order to qualify for a PPP loan, an individual cannot be charged with a felony. Some of the inmates bonded out of jail after receiving the PPP loan.
Police arrested 15 of the suspected perpetrators, charging the individuals with crimes such as theft and wire fraud. Law enforcement is looking for the remaining 10 individuals. State and federal law enforcement took part in the investigation, dubbed Operation Triple P.
In November 2021, detectives from the Joliet Police Department in Joliet, Illinois, began comparing names on PPP loans to the names of prison inmates facing felony charges. The majority of PPP loans included home addresses. The police checked the residences and discovered the fraud.
Maria Beach and Adrian Clark—who were both locked up during COVID-19 from charges related to gun offenses—were among the arrested individuals.
The duo applied for PPP loans from cell phones. Both Beach and Clark claimed to run a barbershop. Clark is said to have received two PPP loans totaling $42,000 while Beach received almost $21,000.
“These triple-P loans that they’re obtaining fraudulently, they are taking that money out of the businesses in our local area that actually need them,” R. Sean Fitzgerald, the acting special agent in charge of the Chicago Office of Homeland Security Investigations, told Fox 32 Chicago.
Rampant Fraud, Inefficient Distribution
As much as $80 billion of the $800 billion PPP program is estimated to have been stolen, according to an NBC report. Speaking to the media outlet, Matthew Schneider, a former U.S. attorney from Michigan, called it the “biggest fraud in a generation.”
In addition, fraudsters are believed to have stolen as much as $400 billion from the $900 billion COVID-19 unemployment relief program.
PPP loans were aimed at helping small businesses keep their employees and hire back any laid-off workers. However, it has been inefficiently implemented, according to some experts.
The PPP program was “poorly targeted, as almost three-quarters of its benefits went to unintended recipients, including business owners, creditors, and suppliers, rather than to workers,” a study by two economists from the Federal Reserve Bank of St. Louis states.
To fund every $1 of wages and benefits supported by the program, taxpayers spent $4. In addition, $3 out of every $4 that went to small businesses ended up being shared with banks, suppliers, and other lenders.
Citing an analysis by the American Economic Association (AEA), the economists pointed out that 72 percent of PPP funds went to the top 20 percent of households in terms of income.