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In our investigative work at the PRAC, we’ve seen fraud schemes that cross state, program, and agency boundaries.
Fraudsters often attempt to “multi-dip,” or defraud multiple pandemic relief programs or one program multiple times, as seen in the cases below.
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Fleeced to meet you
A former Massachusetts pizzeria owner was delivered a two-year
sentence and ordered to pay nearly $680,000 in restitution for a
multi-dipping scheme in which he defrauded the Paycheck Protection Program (PPP), Economic Injury Disaster Loan (EIDL), and Pandemic Unemployment Assistance (PUA) relief programs.
He submitted a fraudulent PPP loan application and received over $660,000, in part by claiming he had 47 employees at his pizzeria when he had seven. He then used the stolen funds to buy a farm in Vermont and eight alpacas to start a petting zoo. He used the names of his two children to collect EIDL loans for businesses that did not exist. While the pizzeria was still open for business, he collected over $17,000 in PUA, claiming that he had been out of work for months.
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Dipping across state lines
A group of four individuals, referred to as the "Fraud Ring," were charged with fraudulently obtaining over $7 million in pandemic relief funds.
The group allegedly used stolen identities to register fraudulent companies with state governments, obtain employer tax IDs from the IRS, and
falsify tax and bank records in order to mislead lenders and acquire PPP and EIDL loans. The group also purportedly took advantage of unemployment benefits from five different states and had funds deposited into several fraudulent bank accounts.
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The Big Dipper
The alleged leader of a six-person fraud ring faces 26 charges in Washington State, some of which stem from a scheme to defraud a rental assistance relief program. The ringleader allegedly received more than $740,000 by posing as a landlord on 21 different applications. According to charges she taught her co-defendants how to execute similar schemes while taking kickbacks for her efforts.
The defendant is also charged with defrauding the PPP, EIDL, and four different states' Unemployment Insurance (UI) programs. The stolen funds were used to buy luxury vehicles, jewelry, and plastic surgery.
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3 dips, 1 guilty plea
In St. Louis County, MO, a man pleaded guilty to bank fraud and wire
fraud for defrauding the PPP and EIDL relief programs by falsely claiming
to own a business that he did not own. After receiving both a PPP and EIDL loan, he claimed to be a self-employed event planner and out of work for
six months to collect unemployment benefits. In total, he received more
than $42,000 in relief funds.
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 Cross-country dipping
The Department of Labor Office of Inspector General released a report
that revealed over 200,000 Social Security Numbers (SSNs) were used between March 2020 to October 2020 to claim UI benefits in multiple states. In one instance, an individual used one SSN to file claims in 40 states, and received over $220,000 in benefits in 29 states.
Dip into our new program pages to learn more about pandemic unemployment relief programs.
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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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