June 16, 2024

The swift introduction of large-scale relief programs in response to the COVID-19 pandemic in 2020, providing aid to businesses and the jobless, also unwittingly provided opportunities for criminal enterprises. Street gangs such as the Traveling Vice Lords and the Wild 100s quickly learned how to defraud these programs, harnessing millions towards the acquisition of firearms and narcotics as per the U.S. Justice Department and court records.

Even incarcerated criminals exploited these programs to unlawfully acquire unemployment benefits, estimated to amount to a quarter of a billion dollars at the national level.

Well-known instances of clear and blatant fraud include that of Nuke Bizzle, a Tennessee rapper, who was handed a six-year prison term for admitting to fraudulent gains from COVID-19 unemployment insurance benefits. These amounted to more than $700,000. His music video, boasting of these scams, gathered almost 290,000 views on YouTube.

Chicago saw a sharp inflation in the cost of illegal firearms during the pandemic, but street gangs, accessing fraudulent COVID-19 relief funds, managed to maintain their purchases. In Milwaukee, an instance was reported where a gang member used fraudulent coronavirus relief benefits to finance an assassination.

Michael C. Galdo, the director of COVID-19 fraud enforcement for the Justice Department stated, “We’ve repeatedly seen a connection between violent crime, violent criminal street gangs and the COVID fraud space throughout the country.” Galdo further added that this scale of fraud was unprecedented and that the vulnerability of these programs was well-known.

Instructions for committing fraud on these benefits were circulated on online chat channels, hosted beyond U.S. jurisdiction, hampering the government’s ability to intervene.

The Small Business Administration, responsible for the management of Paycheck Protection Program loans and Economic Injury Disaster loans, estimated in June that at least 17% of the funding, amounting to $1.2 trillion, was fraudulently acquired. The Justice Department maintains that over 3,000 people nationwide have been apprehended for COVID-19 benefits fraud.

The lack of detailed documentation requirements for applicants’ work and business histories facilitated the unlawful exploitation of these programs. People from various backgrounds, ranging from teachers to cops in Chicago, participated in this illicit activity.

Evidence indicates a potentially massive level of fraud in PPP loans and other forms of pandemic relief aid by street gangs.

Jeffrey Strauss, supervisor special agent with U.S. Homeland Security Investigations based in Chicago, supported the correlation between PP funds and financial support for the activities of street gangs, which included narcotics trafficking as well as gun purchases.

Strauss’s team, which collaborates with the Chicago Police Department, IRS, and other agencies to investigate drug dealing gangs, intercepted phone conversations within this group. These showed gang members discussing the status of their unlawful financial gains. He shared, “It was very general talk: ‘Hey, did you get that money yet? Or: ‘Did you file that paperwork yet?’ “.

Strauss added that gang members exploited these funds to purchase guns and sometimes enlisted the help of straw purchasers to buy firearms for them.

Frequently Asked Questions

What is the extent of the crime related to Covid-19 relief funds fraud?

There have been a considerable number of fraudulent incidents related to Covid-19 relief funds across the USA. More than 3,000 people have been charged nation-wide, a figure that is likely to increase given the immense scale of the relief programs introduced. In one estimate, at least 17% of the $1.2 trillion allocated under the Paycheck Protection Program loans and Economic Injury Disaster loans was obtained fraudulently.

Who were the parties involved in the defrauding of Covid-19 relief funds and how was the money misappropriated?

The parties involved in this massive fraudulent operation came from various walks of life and included street gangs, fraudsters, and even incarcerated individuals. The stolen funds were used in various illegal activities which included the purchase of narcotics and firearms. The growing evidence suggests that street gangs were diversifying the stolen funds into narcotics trafficking and into intensifying the illegal firearms trade.

How were street gangs able to carry out fraudulent activities successfully?

The fraudulent activities were facilitated by the gaps in the system. The relief programs didn’t require detailed documentation about the applicants’ work histories and business records. This loophole was exploited by fraudsters to apply for relief under fictitious enterprises. The information on exploiting the loopholes was also widely shared on online channels and passed around within criminal networks.

Chicago gang members’ preferred illegal firearm, the Glock, saw a price surge during the pandemic. The price of a “street Glock” even spiked above $1000, especially if fitted with an extra magazine or an unlawful converter, also known as a switch, which transforms the weapon into a machine gun, according to Strauss. The high increase in illegal Glock prices is likely due to gun shortage during the pandemic, and the availability of cash to gang members through PPP loans contributed to the surge.

These funds might also have fuelled other violent activities in the city involving drug trafficking and the gun trade. Gang members used PPP money not only for buying guns, but for purchasing high-end muscle cars and other luxurious items. The Chicago Sun-Times review of 15 federal gun and drug cases in Chicago since early 2020 reveals a prevalent link between street criminality and PPP loan fraud. Multiple loans were tied to names appearing on PPP loan applications and SBA databases. The loans were also reportedly forgivable, so often didn’t need repayment.

![Kenneth Roberson](https://cst.brightspotcdn.com/dims4/default/3b10ff8/2147483647/strip/true/crop/1952×1472+0+0/resize/840×633!/quality/90/?url=https%3A%2F%2Fcdn.vox-cdn.com%2Fthumbor%2Fzm2cnmyXlIDE7WJDKloiYW2vG3g%3D%2F0x0%3A1952x1472%2F1952x1472%2Ffilters%3Afocal%28976×736%3A977x737%29%2Fcdn.vox-cdn.com%2Fuploads%2Fchorus_asset%2Ffile%2F24976842%2FScreenshot_2023_10_04_at_12.41.02_PM.png)

### O Block and PPP Loan Fraud

An O Block gang member boasted about how easy it was to get PPP loans. Kenneth Roberson, a reputed O Block member, is scheduled to go on trial related to the murder of Carlton Weekly, also known as rapper FBG Duck. According to an FBI affidavit, Roberson discussed PPP loan fraud with an inmate over a phone call. The defendant claimed that he was operating an agriculture business under his name, but he didn’t own any such business or have employment.

PPP loan applications listed phone numbers related to evidence in Weekly’s murder. Several individuals applied for loans using these numbers in the summer of 2020. Despite evidence of PPP fraud, none of them face charges for this particular form of fraud.

![Nassar Buford](https://cst.brightspotcdn.com/dims4/default/41e3b4d/2147483647/strip/true/crop/1177×1469+0+0/resize/840×1048!/quality/90/?url=https%3A%2F%2Fcdn.vox-cdn.com%2Fthumbor%2FpiKLzlfmQ7tT4KNzO8HwBNZEBOo%3D%2F0x0%3A1177x1469%2F1177x1469%2Ffilters%3Afocal%28589×735%3A590x736%29%2Fcdn.vox-cdn.com%2Fuploads%2Fchorus_asset%2Ffile%2F24976977%2FScreenshot_2023_10_04_at_1.22.23_PM.png)

### PPP Funds Misused For Crime in Wisconsin

The Wild 100s gang in Milwaukee allegedly scammed millions in unemployment benefits, according to an indictment filed in April against about 30 people. Members of the gang utilized these fraudulent payments to buy jewelry, machine guns, drugs, vacations, and even solicited a murder.

**Frequently Asked Questions**

**How were PPP loans abused during the pandemic?**

Many individuals falsely claimed to operate businesses for securing PPP loans fraudulently. This involved providing false information or using someone else’s identity. Such funds were primarily used for luxury purchases or illicit activities, including gun trading and drug trafficking.

**What were the repercussions of PPP loans misuse by Chicago gang members?**

The illegal use of PPP loans by gang members exacerbated other criminal activities, such as drug trafficking and gun trade, in the city. Fraudulent funds allowed gang members to continue buying guns despite spiked prices during the pandemic. Street violence in Chicago was thus indirectly fuelled by PPP loans.

**Did the misuse of PPP loans lead to any legal proceedings?**

Yes, several gang members have been taken into custody and prosecuted for crimes such as fraud and violence. None of the individuals involved in the cases mentioned above have been charged for PPP loan fraud specifically, however.A 20-year-old man named Nassar Buford was found dead in Milwaukee, which was linked to a plot perpetrated by the leader of the Wild 100s gang. Federal prosecutors disclosed that the gang leader made an online call to assassinate either the mother or sister of a rival gang member, using a confidential informant as their primary evidence source.

Judge William Duffin declined any pre-trial release for the convicted leader, noting his influence within the Wild 100s gang and his central role in defrauding the government of millions in COVID-19 relief. This includes the scam led by Michael Anderson (another defendant), who cheated the government out of nearly $117K in unemployment benefits.

Elsewhere, soldier Brandon Miller is charged with providing weapons to South Side gangs and orchestrating a scheme to fraudulently gain PPP loans. In Nashville, Tennessee, Miller and an associate are accused of obtaining PPP loans using stolen personal information.

In Maryland, Attorney Erek Barron extends investigations into violent offenders to possible COVID-19 benefit fraud, attributing a reduction in homicides to rigorous prosecution of such fraud. However, Chicago hasn’t followed suit, preferring to reserve fraud accusations as sentencing enhancements. A case in point is Tyjuan Lighthall, who confessed to COVID-19 benefit fraud and illegal firearm possession, resulting in a five-year prison sentence.

Galdo of the Justice Department urges people to be concerned, criticizing the ease with which career criminals plundered public funds to finance their illicit activities.

### Frequently Asked Questions
**Q: Who is the leader of the Wild 100s gang?**
A: The leader has not been directly identified in the article. However, he/she played a significant role in the gang, leading to a judge denying pre-trial release. The leader is also cited for teaching others how to defraud the government.

**Q: What was the nature of Brandon Miller’s alleged crime?**
A: Brandon Miller, a soldier from Fort Campbell, allegedly provided guns to a group of South Side gangs and orchestrated a fraudulent PPP loan scheme. He reportedly used stolen personal details to obtain the loan.

**Q: How are defendants in Chicago being prosecuted for their potential involvement in COVID-19 benefit fraud?**
A: In Chicago, allegations of COVID-19 benefit fraud are normally used during sentencing as a way to increase jail time. For instance, Tyjuan Lighthall, who admitted to benefit fraud and illegal possession of a firearm, was sentenced to five years in prison.