June 15, 2024

Investigations are underway as many of the federal COVID-19 relief loans given to more than 1,000 Chicago city employees, including officers, seem fraudulent, according to City Hall’s Inspector General, Deborah Witzburg. Witzburg’s office analyzed over 350,000 approved loans in the Chicago area – among these, a significant number of loans received by city workers from the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan program are suspected of fraud.

Witzburg’s report on Friday stated that among the suspect cases, proceedings are in motion against an employee from the Streets and Sanitation Department alleged to have committed PPP fraud. The individual seemingly fabricated tax records and falsely declared business income for a hair salon. This case emanates from extensive investigations of financial records and worker interviews.

Witzburg has been investigating pandemic-related fraud for over a year, as disclosed in her [report](https://igchicago.org/wp-content/uploads/2023/10/Quarterly-Report-Third-Quarter-2023.pdf). The report, however, did not provide specifics about the officers involved. With the investigation still ongoing, Witzburg emphasized that the priority lies with people occupying positions of substantial public trust.

The nature of PPP loans, which do not typically need to be repaid, and the availability of significant amounts to “sole proprietors”, have contributed to the high rate of fraudulent activity seen across these programs. Alongside this, the ability to receive Economic Injury Disaster grants of up to $10,000, which similarly do not require repayment, have added to the situation. It was estimated that around 17% of the total $1.2 trillion disbursed through these programs was obtained fraudulently.

Simultaneously, Cook County’s interim inspector general, Steven Cyranoski, highlighted that seven county health department employees potentially obtained COVID-19 benefits illegitimately. Among these, six have resigned and Cyranoski has recommended termination for one. Last month, Crystal Cooper, head of school operations, had to resign owing to findings made by Will Fletcher, Inspector General for the Chicago Public Schools, where Cooper inflated her income to secure a larger relief loan.

The report released by Witzburg also details various cases of other wrongdoing by city employees, including a police officer who received a two-month suspension for threatening violence against an ex-partner and their family. Furthermore, she recommended that both the police department and the city Office of Emergency Management and Communications should enhance their record keeping for officers’ response times to 911 calls. She also found low levels of participation in a new voluntary mediation pilot program aimed at resolving disputes between citizens and police officers.

#### FAQ:

**1. What is the nature of the alleged fraud in the PPP loans?**
The alleged fraud includes false declarations of business income and the fabrication of tax records. City Hall’s Inspector General, Deborah Witzburg, discovered these discrepancies through a deep investigation of financial documents and interviews with the city employees who received these loans.

**2. How are the investigations for the alleged fraud organized?**
The investigations, currently ongoing, prioritize individuals in positions of significant public trust. Depending on the severity and extent of the fraud, the matter will either be pursued administratively or criminally.

**3. What is Deborah Witzburg’s role in these investigations?**
As the Inspector General for City Hall, Deborah Witzburg is the chief investigator for these allegations. She has spearheaded a large-scale effort to scrutinize over 350,000 federal COVID-19 loans approved in the Chicago area and continues to oversee the investigation.