“Fake Farms” Reaped $2 Million In Covid-19 Aid Relief Program Meant for Small Businesses
With no one checking on who was getting forgivable Paycheck Protection Program (PPP) loans, the federal lending program has been rife with fraud.
It should come as no surprise that hundreds of fake farm businesses in places that have no farms applied for and received the money to “pay” their employees during the Covid-19 pandemic shutdowns, according to a new exposé from ProPublica.
The investigative piece reveals that beach towns in Ocean County, New Jersey were the locations for these phantom farms — wheat farm “Ritter Wheat Club” and tree nut farm “Deely Nuts,” each got $20,833, the maximum PPP funds available for sole proprietorships, ProPublica reported.
Up the coast in Brielle, “Tomato Cramber” got $12,739, and “Seaweed Bleiman” in Manahawkin got $19,957, the journalism outlet found.
These were just a few examples of the allegedly fraudulent loans fulfilled through Kabbage, an online lender that processed almost 300,000 PPP loans. In March 2020, Congress passed and President Trump signed the CARES ACT and the $349 billion PPP program was part of the bill. The program was renewed in August 2020 when the first round of funds ran out.
Lenders were not required to ask many questions.
Only Bank of America processed more PPP loans than Kabbage, ProPublica reported.
No wonder there’s tens of millions of dollars of fraud in the PPP program. Turns out that giving financial incentives to lend without asking too many questions is a bad combination.
The #WasteOfTheDay is presented by the forensic auditors at OpenTheBooks.com.