LOUISVILLE, Ky. (WAVE) – Money is one of the main things businesses and people needed to survive through the pandemic.
Mohammed “Mo” Sloan is the CEO and founder of EZ-Chow, a digital ordering company that gets rid of third-parties for restaurants and hospitality organizations.
The PPP loan he obtained legally helped keep his business afloat during the pandemic.
“People took advantage of companies, especially small businesses, by taking funds that weren’t applied for them or applicable for them,” Sloan said.
EZ-Chow serves more than 200 companies across the county and has about seven employees. He was able to receive the PPP loan during both rounds.
“Any additional funding we can get that helps tremendously,” Sloan said. “Was it enough? Not really.”
Businesses walked away with billions in funding, however, some of those businesses are not real.
Like 49-year-old Randall Blankenship’s fake payroll scheme with his Woodford County business that stole $1,323,829. The U.S. Department of Justice said he’s facing 20 years in prison.
Karenda Vaughn from Laurel County is also facing 22 years in prison for COVID fraud.
Dave Christopher is the founder of the Russell Tech Business Incubator and helps minority businesses get past financial roadblocks.
“I’m not surprised… it was ripe for fraud,” Christopher said. “The system was set up for those who could figure out how to manipulate it. Businesses are struggling and you hear the calvary is coming, and then the calvary rides right by you.”
Christopher said it was minority businesses that were blocked out the most from PPP loans because they didn’t have the structure ready.
Meanwhile this week the Secret Service announced almost $100 billion was stolen from COVID relief funds and as much as $400 billion stolen from unemployment programs.
The U.S. Labor Department reported about $87 billion dollars in unemployment benefits could have been paid improperly, mostly again connected to fraud.
“Waste and fraud just hurts everybody at the end of the day,” Sloan said.
The Small Business Association Southeast Region serves Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, and Tennessee. It approved a total of over 53,000 PPP loans valued at more than $4 billion.
Nationally, more than 400,000 loans valued at more than $35 billion have been approved for the January 2021 round. Overall, the average loan size is $87,000.
Together, more than 5.5 million PPP loans were approved totaling more than $557.8 billion.
“It was set up for people with power to get more power,” Christopher said.
Christopher said there should have been levels for different incomes to focus on helping small businesses. At the end of the day, he said people will always take advantage of something that’s meant to do good.
The Secret Service said there are currently 900 active criminal investigations into pandemic fraud. 100 people have been arrested so far.
Through financial institutions, the Secret Service said it has been able to reverse some of the payouts. The Secret Service pandemic coordinator said all of the estimates revealed are conservative and they are still working to hold people who lied and stole money accountable.
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