Using food to serve up fraud?
That's not on our menu.
This month we look at several pandemic fraud cases that occurred in the farming, restaurant, and food industries.
Scam-to-Table
A Hollywood man was arrested for allegedly trying to obtain $65 million
in employee retention credits for a nonexistent Beverly Hills farming business. The defendant allegedly used over $2.7 million he received
in tax credits for personal expenses.
Feeding Frenzy
Double Order
Two owners of multiple restaurants in San Diego were arrested in a
Paycheck Protection Program (PPP) and Restaurant Revitalization Fund (RRF) fraud scheme. In an attempt to cook the books, the pair allegedly underreported over $1.7 million in profits on one of their restaurant group's tax returns to qualify for the funds.
The second order occurred when authorities found over
$2.4 million in cash that is alleged to be substantial withdrawals
from their respective business accounts.
Fraud Farms
A Miami-based couple was sentenced for their roles in a $1.1 million
PPP and Economic Injury Disaster Loan (EIDL) fraud scheme in
which they both claimed to employ over a dozen people for companies
that didn't exist. To receive the EIDL payments, they both claimed
to generate hundreds of thousands of dollars while employing multiple
workers for farms that apparently were located in their yards in Miami.
That's Nuts
A trio of brothers from Ohio was involved in a fraud scheme in which
they made up over 70 fictitious companies all with agricultural sounding names, such as "Ohio Almonds and Peanuts," in order to collect
EIDL funds. They successfully received over $7 million for
47 of their fake companies.
While two of the brothers are still at large, the third was sentenced to 33 months in prison and has agreed to pay $1.2 million in restitution.
 Open for Business
More than 100,000 restaurants received grants from the Restaurant Revitalization Fund program which provided more than
$28 billion in relief money.
Recently, the Small Business Administration (SBA) watchdog released
a report showing how 3,790 RRF applications were processed without verifying their gross sales, a key control designed to prevent potentially improper payments. As a result, nearly all applications were approved
for a total of $557 million in RRF loans. SBA took action to halt
nearly half of them, but still has over 2,000 to review for assurance
that the applications are accurate.
Disclaimer: An indictment is a formal accusation of a serious crime. However, all defendants are presumed innocent until proven guilty beyond
a reasonable doubt in a court of law.
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