Monday, August 23, 2021

PPP/EIDL Fraud Prosecution - Couple Sent to the Slammer

Due to a case investigated by the SBA-OIG, USPIS, and TIGTA (if you recognize all of these acronyms you win a gold star and a free lottery ticket), a Florida couple were each sentenced to a jail term (18 months for the gal; 30 months for the guy) for defrauding the federal government.

Latoya Stanley and Johnny Philus decided to be a bit creative when they filed for PPP free money last year. So why not claim, as Stanley did, to employ 18 persons in her beauty supply LLC. Philus did her one better; he claimed to employ 29 in his auto boutique LLC. Neither firm had any employees.

But why stop there, they reasoned, so they did not. Stanley claimed to employ 5 persons and generate $800,000 of gross income from a farm in her little back yard. Philus, again trying to outdo his significant other, claimed 10 employees and $400,000 of gross income from a farm in his back yard. Each of their residential lots were under one acre in size.

Of course, the farms did not exist. The beauty supply and auto boutique businesses (which did exist, on paper) did not employ anyone.

They filed their applications, waited, and eventually received more than $1 million from PPP and EIDL funds. They were arrested on August 26, 2020 and charged with fraud. After pleading guilty, they were sentenced on June 2, 2021 in Southern Florida District Court.

The couple were investigated by the SBA’s Office of Inspector General (SBA-OIG); United States Postal Inspection Service (USPIS); and, Treasury Inspector General for Tax Administration (TIGTA).

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