Small business owners share their difficult and confusing journeys in applying for the loan for the paycheck protection program.
Lola Shalewa Barbara Kasali of Houston was charged with making false statements to a financial institution, wire fraud, bank fraud and being involved in illegal monetary transactions, according to a statement from the U.S. Department of Justice.
Officials say Kasali, 22, allegedly filed two false PPP loan applications for two companies – Lola’s Level and Charm Hair Extensions – and claimed to have multiple employees and large payroll expenses.
“According to the charges, however, neither the unit has employees nor pays salaries that are commensurate with the amounts required in the loan applications,” according to the statement.
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After receiving more than $ 1.9 million in loans, Kasali transferred the funds to four additional bank accounts, officials said. Kasali is expected to appear before U.S. Judge Christina Bryan in Houston on Wednesday.
This is not the first incident where a person is accused of fraudulently receiving PPP loans. In July, a man in Florida was accused of receiving $ 3.9 million in loans to, among other things, buy a Lamborghini sports car.
A report released earlier this month showed that PPP loans, originally designed for small businesses, were misallocated to businesses that had already received a loan or were excluded from the program. The report shows, among other things, that approx. 10,000 loans went to companies that received more than one PPP loan.
“The Treasury must improve oversight and accountability to ensure that taxpayers’ dollars are not wasted,” said James Clyburn, DS.C., chairman of the elected subcommittee on the Coronavirus crisis.
“Taxpayers should not have to choose between quickly getting help for those who need it and wasting federal funds, and there are simple steps that could have been taken to improve supervision and reduce fraud,” he said during a consultation when the report was released.
Payroll protection program expired on August 8 without any clear plan to expand it. The program was part of the Coronavirus Aid, Relief and Economic Security (CARES) Act passed by Congress in March, which offered assistance to more than 5 million businesses.
Contributions: Ledyard King and Nicholas Wu, USA TODAY
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