COVID loan fraud investigated at Tri-Cities, Hanford, WA
A federal task force is investigating multiple cases of federal loans for COVID-19 relief in the Tri-Cities area based on fraudulent claims, federal prosecutors said.
He reached a $3.2 million settlement with the Hanford nuclear reserve’s occupational medicine contractor, HPM Corp., in March, but there are other cases of subcontractors or subcontractors. handlers suspected of double dipping, said Dan Fruchter, assistant U.S. attorney for eastern Washington.
They appear to have received loans for expenses that were already covered by taxpayers’ money through the Department of Energy, he said.
Additionally, a U.S. Attorney’s Office COVID-19 Fraud Strike Force is investigating other fraud cases in eastern Washington that run the gamut from businesses too large to qualify for federal small business loans to people who have obtained loans for businesses that did not exist, Fruchter told the Tri-City Herald.
“COVID-19 relief programs, which were essential to restarting our economy and supporting our families, quickly ran out of money due to the number of people and businesses applying for funding,” said Vanessa Waldref, l US district attorney.
“It’s not fair that some deserving small businesses couldn’t get funding to maintain operations during the COVID-19 pandemic, while others abused the program,” she said.
The U.S. Attorney’s Office for the Eastern District of Washington created the strike force this spring, to channel resources toward investigating and prosecuting COVID-19 fraud.
E. Case of Washington
In its agreement with HPMC Corp. in Hanford, the company agreed to pay nearly $3.2 million in restitution and penalties, including a $250,000 penalty against its owners.
The company received a $1.3 million loan under the CARES Act’s Coronavirus Aid, Relief, and Economic Security Paycheck Protection Program.
But instead of using the loan for payroll, the entire amount was transferred to the personal account of Hollie Mooers, the founder and president of HPMC, and her husband, Grover Cleveland Mooers, according to an investigation by the office of the Inspector General of the Ministry of Energy. .
This was about three months after the loan and interest was canceled by the federal government. About two months later, the entire loan amount was distributed to charities.
This case was pursued through the US False Claims Act, which can result in agreements to repay up to three times the amount of the loan to the federal government and its taxpayers.
Other cases in eastern Washington are being prosecuted as criminal cases.
Karla Padilla, 48, of Yakima, was charged in May with seven counts of fraudulently obtaining COVID-19 relief money.
She is accused of obtaining three federal loans totaling approximately $59,000 for Queen B Collectibles, allegedly a collector car company, and applying for four other loans which were denied.
But Queen B Collectibles had no employees, receipts or business dealings, according to US attorneys.
In a separate case, Roshon Edward Thomas, 52, of Spokane, pleaded guilty in May to fraudulently obtaining more than $50,000 in COVID-19 relief funds for an alleged tattoo parlor and clothing design business. .
Little control of COVID loans
Federal loans were issued in times of crisis as businesses closed and employees were left without a paycheck.
“There just wasn’t a time when the money was doled out to do much, if any, due diligence…” Fruchter said. “And so what’s happened is that billions of dollars have been spent with really no controls in place other than trusting people when they promise, under penalty of perjury, that they have a genuine company and that the information is true and correct.”
Now the COVID-19 Fraud Strike Force is prosecuting people who lied, he said.
The CARES Act loan program has disbursed hundreds of millions of dollars to eastern Washington, the vast majority of which has not been repaid, according to the US attorney’s office.
It is led by Fruchter and Assistant U.S. Attorney Tyler Tornabene — along with an attorney assigned to the Department of Energy’s Inspector General’s Office — as well as support staff specializing in financial analysis and e-discovery.
Also participating are federal agents, as required, from 14 federal agencies, ranging from the Federal Bureau of Investigations to the Internal Revenue Service.
Part of the goal is to quickly move cases forward, especially for small businesses or fake businesses, with assets that may no longer exist if U.S. attorneys don’t act quickly to seize them, according to the office of the US attorney.
“We want to recover as much as possible for the public,” Fruchter said.