A postal worker from the U.S. was given a federal prison sentence for leading a fraud group which claimed multiple non-existent PPP loans.
Tiffany McFadden, from New York and Florida, was indicted by the District of South Carolina’s U.S. attorney’s office. She was accused of directing a scheme involving over 400 illegitimate applications for PPP loans. This program was conceived to aid business in maintaining their staff and handling other costs during the Covid-19 pandemic.
McFadden, who is a U.S. Postal Service employee, together with others implicated in the scheme, secured more than $2,000,000 in loans. This money was later completely written off by the U.S. government, as reported by the Department of Justice on Thursday.
According to the department, the fraud group sought loan applicants through word-of-mouth and created fake business paperwork. Most of the fraudulent applications listed phantom companies in the small towns of Kingstree, Johnsonville, and Hemingway, all located in eastern South Carolina.
The sentencing of McFadden comes more than three years following the introduction of the federal Paycheck Protection Program at the beginning of the Covid-19 pandemic. This was part of the Coronavirus Aid, Relief, and Economic Security Act which was administered under former President Donald Trump.
American taxpayers were robbed of millions through this scheme which exploited the country’s generosity for legitimate businesses, in the words of U.S. Attorney Adair F. Boroughs, during a statement on Thursday.
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Other Postal Workers Allegedly Assisted McFadden
Felony charges are currently ongoing against two other postal employees, Cherry Lewis, 43, from Johnsonville and Keisha Lewis, 33, from Hemingway.
McFadden was handed a sentence of over three years in federal prison without the possibility of parole. The court also instructed her to pay restitution amounting to $2,191.257 to the U.S. Small Business Administration. The U.S. Attorney’s Office for the District of South Carolina has not yet made any comments on this matter.
Extent of Fraud Involving Covid Relief Money
The Small Business Administration stated in a report published in June that fraudsters potentially stole more than $200 billion in Covid-19 relief loans and grants designated for small businesses. The same report found that approximately 17% of Economic Injury Disaster Loans and PPP loans were paid out to potentially fraudulent actors.
Many instances of individuals fraudulently obtaining Covid relief funds have emerged in recent years. One example is a woman from California who attempted to escape jail time by fleeing to Montenegro after she was found guilty of helping to steal $20 million in pandemic relief funds. Federal authorities later extradited her to the United States.
One Florida man admitted guilt in a scheme that got him $2.6 million, which led him to forfeit a house, a boat, a diamond weighing 4.02-carats, and hundreds of rounds of ammunition.
Moreover, a businessman from Maine confessed to securing a $59,145 loan for his company by using falsified employee wage details and supporting payroll documents. The justice department reported that he spent the money on items and expenses which were not eligible for coverage by the program.
Frequently Asked Questions
What were the crimes committed by Tiffany McFadden?
Tiffany McFadden, a U.S Postal Service employee from New York and Florida, was implicated in a fraud scheme. The scheme involved more than 400 fraudulent applications for PPP loans destined to help businesses during the pandemic. These loans totaled to over 2 million dollars which was later fully forgiven by the U.S. government.
How was Tiffany McFadden punished for her crimes?
McFadden was given a sentence of over three years in a federal prison with no parole. In addition to this, McFadden was ordered by the court to pay restitution of $2,191.257 to the U.S. Small Business Administration.
What is known about the total amount of PPP loan fraud during the pandemic?
An illustrative report published in June by the Small Business Administration expressed that potentially fraudulent actors may have stolen over $200 billion in Covid-19 relief loans and grants intended for small businesses. The report also found that around 17% of Economic Injury Disaster Loans and PPP loans ended up being disbursed to such fraudulent actors.
