An Arizona man pleaded guilty to wire fraud and filing a false refund claim with the IRS, after Congress gave Trump a $6 trillion slush fund and failed to protect taxpayer money from abuses during the coronavirus pandemic.
According to court documents and statements made in court, in 2020 and 2021, Roy L. Layne submitted false applications on behalf of several bogus businesses to the U.S. Small Business Administration (SBA) for loans from the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) program, two federal programs created to provide financial assistance to Americans suffering economic harm as a result of the COVID-19 pandemic.
In those applications, Layne claimed that the businesses had dozens of employees and earned hundreds of thousands in gross receipts.
To support his false claims and to create the appearance of genuine business activity, Layne created false business and employment tax forms that he filed with the IRS and submitted to the SBA.
In total, Layne requested and received over $300,000 in loans to which he was not entitled.
In addition, in 2022, Layne filed false returns with the IRS that sought nearly $7.5 million in refunds, of which the IRS paid approximately $550,000.
Layne is scheduled to be sentenced on Feb. 3, 2025. He faces a maximum penalty of 30 years in prison for each wire fraud charge and five years for the false claim charge. He also faces a period of supervised release, restitution and monetary penalties.
A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Congress created the PPP in March 2020, as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act, to provide emergency financial support to the millions of Americans suffering economic hardship due to the COVID-19 pandemic.
The CARES Act authorized billions of dollars in forgivable loans to small businesses struggling to pay employees and other business expenses. In December 2020, Congress approved funding for a “second draw” of PPP loan funds, which became available to borrowers beginning in January 2021.
Hundreds of PPP loan borrowers were later determined to have lied or otherwise schemed to cheat taxpayers. By the time Trump left the White House, the government seized over $58 million in fraud proceeds from at least sixty-six cases against ninety-four defendants. Many more prosecutions have occurred since then.
“The CARES Act is 880 pages of outrage and corruption, that gave Republican President Donald Trump a $6 trillion slush fund without adequate oversight or guidance to prevent abuses,” said Lisa McCormick shortly after lawmakers established the program in 2020. “Instead of stabilizing the economy, it enriches the rich and insults the 99 percent of Americans who follow the rules. This is worse than the TARP bailouts under Bush.”
“The Paycheck Protection Program is one of the most deceptive parts of the CARES Act, but the program might as well have been administered by the Trump campaign organization instead of the Small Business Administration,” said McCormick, who is widely known for challenging US Senator Bob Menendez in the 2018 Democratic primary election.
“The CARES Act is a $6 trillion slush fund that will benefit Republican President Donald Trump’s re-election campaign and it was approved almost unanimously by Democrats in Congress, even though it won’t help many people in Princeton or Plainfield,” said McCormick.
Billions of dollars went to companies owned by wealthy celebrities, including Tom Brady and Khloe Kardashian, as well as companies that thrived during COVID, like many manufacturing and construction firms. Those recipients rarely faced criminal penalties.
Government officials now acknowledge that the program was rife with fraud and did not weed out undeserving applicants. Data released by the Small Business Administration showed that 92% of those loans had been granted full or partial forgiveness before the end of 2022.
Still, hundreds of criminal cases were brought and many are still in the process of being resolved.
A California law firm agreed to pay $274,000 on August 15, 2024, to settle allegations that they lied on a PPP loan forgiveness application
A Georgia attorney and former City of Atlanta police officer was sentenced June 7, 2024, to seven years and three months in prison for conspiring to defraud the Paycheck Protection Program (PPP) of approximately $15 million.
Three people were sentenced in February 2024, for fraudulently obtaining $3.5 million in PPP loans.
On August 8, 2024, a network of dental offices in Southern California, and its founders and former owners, paid $6.3 million to resolve allegations that they knowingly violated the False Claims Act in connection with seven improper PPP loans.
More than 200 press releases from the U.S. Attorney for the District of New Jersey were related to the Paycheck Protection Program.
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