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The small-business loan program, known as the
Paycheck Protection Program, is part of an unprecedented $2.2
trillion coronavirus economic package meant to reimburse
businesses and households for lost income due to shutdowns and
stay-at-home orders. The U.S. filed its first criminal charges
for defrauding the bailout program last week.
Maurice Fayne, a star of the show who also goes by Arkansas Mo,
was arrested on bank fraud charges for allegedly using more than
$1.5 million he obtained in the name of Flame Trucking for
himself, instead of retaining workers. He bought $85,000 worth
of jewelry including a Rolex watch, made loan payments and paid
$40,000 for child support with the money, a DOJ statement said.
"The defendant allegedly stole money meant to assist hard-hit
employees and businesses during these difficult times, and
instead greedily used the money to bankroll his lavish purchases
of jewelry and other personal items," Assistant Attorney General
Brian A. Benczkowski of the Justice Department’s Criminal
Division said in a statement.
Fayne's lawyer Tanya Miller said in an email: "There has been
considerable confusion among small business owners about PPP
guidelines - particularly around the question of whether and how
business owners are permitted to pay themselves a salary or take
an owner’s draw."
Prosecutors have also charged Shashank Rai, a Texas engineer,
for allegedly seeking about $13 million in PPP funds from two
separate banks by claiming to have 250 employees, when he had
none, according to a separate statement from the DOJ.
Reuters could not reach a lawyer for Rai.
In March, Attorney General William Barr ordered all U.S.
Attorney offices to prioritize investigations into coronavirus
scams, such as the peddling of fake cures, investment schemes
and Medicare fraud.
The federal government has been pushing to get funds to
businesses quickly as firms struggle to stay in business due to
the coronavirus outbreak.
The charges against Rai were filed on Tuesday in the Eastern
District of Texas, while the charges against Fayne were filed on
Tuesday in the Northern District of Georgia.
(Reporting by Chris Prentice; Editing by Stephen Coates)
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