TEXARKANA, Texas - A Maud, Texas, man is accused of submitting fraudulent applications for more than $5 million in federal Payroll Protection Plan funds meant to provide to relief to small businesses during the COVID-19 pandemic.
Samuel Yates, 32, allegedly made two different applications to two different lenders which included lists of supposed employees he obtained from a random name generator publicly available on the internet, according to a U.S. Department of Justice press release.
"In the application submitted to the first lender, Yates allegedly sought $5 million in PPP loan proceeds by fraudulently claiming to have 400 employees with an average monthly payroll of $2 million. In the second application, Yates claimed to employ over 100 individuals and was able to obtain a loan over $500,000," the press release states.
Yates is accused of submitting forged tax documents with each application. Yates is charged in a criminal complaint with wire fraud, bank fraud, false statements to a financial institution and false statements to the Small Business Administration.
The PPP was created by the federal Coronavirus Aid, Relief, and Economic Security Act which was enacted by Congress in late March.
"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," said Assistant Attorney General Brian A. 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."
Prosecutors are urging banks to use caution when processing PPP loans or other disaster-related relief lending.
"Any time the government provides large amounts of money to the public there are people who will try to cheat the system," said U.S. Attorney Joseph D. Brown of the Eastern District of Texas. "We encourage lenders to be very careful, and to report suspicious applications. It is a priority of the Department of Justice to deter and prosecute this type of fraud."