For some time now we’ve been covering the various emerging reports of people who fraudulently claimed millions of dollars in COVID relief funds through a variety of programs. Perhaps the most pilfered offer from the government was the Paycheck Protection Program. This was a well-intended tool that was put in place after the government shut down the nation’s economy in response to the COVID pandemic. The program allowed employers to keep their workers on the payrolls during the shutdown using forgivable loans from Uncle Sam. Sadly, dishonest people quickly realized that the program had been hastily put together with few provisions for oversight and fraud prevention. Applications began flooding in from people who either greatly exaggerated the needs of their companies or, in some cases, didn’t even have companies. Virtually all of the applications were approved.
One such person was Lee Price III of Houston. He collected $1.6 million from the PPP and proceeded to spend it on a very expensive sports car, a new pickup truck, a Rolex, some personal real estate, and a number of trips to various strip clubs. Fortunately, officials somehow managed to identify the fraud and take action. Price was eventually arrested and on Monday he was sentenced to more than nine years in prison. His attorney assures us that he will use that time to reflect on his poor behavior. (Associated Press)
Lee Price III, 30, was sentenced Monday to 110 months in prison. Price pleaded guilty in September to wire fraud and money laundering.
“Mr. Price hopes that others will learn from his reckoning that there is no easy money,” Price’s lawyer Tom Berg said in an email to news outlets. “He has the balance of the 110-month sentence to reflect, repent and rebuild his misspent life.”
Prosecutors accused Price of fraudulently using more than $1.6 million in funding from the Paycheck Protection Program, which gave low-interest loans to small businesses struggling during the pandemic.
Mr. Price was hardly alone in this sort of grifting. The number of people suspected of fraudulently obtaining PPP loans is simply staggering. One small town in Illinois with a population of only 12,500 accounted for more than 1,700 PPP loans in the past year. (There are barely 300 actual businesses registered in that town.)
Some of you might be reading this story and thinking that everything is under control. After all, with Mr. Price on his way to prison, we’re seeing evidence that the system is working, right? But that’s not correct at all because we’re only hearing about the cases where someone was caught. That situation in Illinois I referenced and linked to above was never detected by authorities when it was taking place. We only know about it because a local CBS News crew combed through all of the records and started asking questions.
It’s true that some other fraudsters have been identified and charged. There was that couple from Los Angeles who were convicted of fraudulently taking more than $20 million in PPP loans. Unfortunately, they were convicted in absentia because they are still on the run. Then there was Mustafa Qadiri, also of California, who scored more than $5 million in the same fashion. He’s still awaiting trial.
But those are just the people who were excessively greedy and exorbitant in their spending, drawing attention to themselves. How many people are out there who asked for more modest amounts for their phony businesses? How many were legitimate business owners but decided to pad their numbers a bit and pocket the difference? It’s very possible that we may never know. There were so many people filing PPP applications that the system was swamped almost immediately. There simply weren’t enough people in the government to thoroughly check every application and follow up on it later. Some analysts have estimated that as much as 18% of the total PPP funds were issued to illicit applicants.
These programs were put in place so the government could demonstrate that it was doing something – anything – to help people during the pandemic. But as with any situation where large amounts of money begin being sloshed around with little to no oversight, thieves will show up in an almost magical fashion. And you, the taxpayers, were left holding the bill.