Philadelphia business owner accused of embezzling $ 1 million in PPP loans

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According to federal prosecutors, the former Philadelphia resident stole about $ 1 million in loans intended to help small businesses weather the pandemic by spending money on diamond rings, a new car and a Florida home.

Devron Brown, 50, was fraudulently received $ 937,500 in June 2020 through the Payroll Protection Program (PPP). federal program of concessional loans to business– said the Attorney’s Office for the Eastern District of Pennsylvania. Brown was arrested and charged with two counts of bank fraud and nine counts of money laundering, authorities said.

In an email, Brown said his lawyer was unable to respond before the Inquirer’s publication deadline. He did not respond to a follow-up email asking if he could comment on a later date.

” READ MORE: Here are 8 things small businesses need to know about PPPs.

Earlier this month, the US Department of Justice said that more than 100 persons involved in more than 70 criminal cases were brought to justice associated with fraud in the framework of PPP. The department recovered more than $ 65 million in cash from fraudulent PPP funds and real estate and luxury items acquired with such proceeds.

It’s a tiny fraction 11.8 million loan approvals totaling nearly $ 800 billion on the program dated May 31, the Small Business Administration reported Loans with an interest rate of 1% are designed to cover wages, mortgage interest, rent or utilities. Loans can be forgiven if firms spend the proceeds on these expenses over a set period of time and use a certain percentage of the payroll.

Brown, whose last known address is in Florida, was the president and owner of Just Us Construction Inc., which had a license to do business in Philadelphia that expired in 2018, according to an indictment filed this month. The indictment stated that the PPP application for the company contained false information about the number of employees, their salaries and payroll taxes. For example, the statement said the company was paying payroll taxes to 25 Pennsylvania employees when it did not actually pay payroll taxes for state employees during that period, the indictment says.

” READ MORE: When it comes to PPP loans, small business owners should stop and think before asking for forgiveness.

Brown also confirmed that the money will be used to keep workers and cover business expenses, according to the indictment. Instead, prosecutors say Brown went for a hefty waste of money, buying a residential property in Florida ($ 250,000), a Lexus GS 350 ($ 42,785) and two 14K white gold diamond rings ($ 6,318). The indictment says he allegedly bought a pickup truck, motorcycle and excavator.

“Thieves who try to take these funds take advantage of someone else’s misfortune – they rob them, as well as rob all taxpayers who fund the program,” said Acting US Attorney Jennifer Arbittier Williams. “Brown allegedly fraudulently obtained nearly $ 1 million in funds that could help troubled companies and individuals.”

Brown allegedly tried to get more PPP money. Authorities said he was responsible for a second fake loan application for about the same amount in early 2021. This application was rejected.

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