New York City and State Government Workers “Stole More Than $1.5 Million” of Federal Covid Loan Subsidies

(p. A19) A New York City correction official, eight Police Department employees and eight other current and former city and state workers schemed to defraud Covid relief programs that were intended to provide money to struggling business owners, the authorities said on Wednesday.

The defendants submitted phony applications for disaster relief loans on behalf of hair and nail salons and day care programs that did not exist, federal prosecutors in Manhattan said. The prosecutors said many defendants spent the proceeds of their loans on personal expenses, like casino gambling, stocks, furniture and luxury clothing.

They collectively stole more than $1.5 million from the federal Small Business Administration and financial institutions that issued guaranteed loans, and the intent was to steal hundreds of thousands of dollars more, the prosecutors said.

. . .

The charges unsealed on Wednesday [Nov. 30, 2022] are part of wave of fraud prosecutions around the country related to the trillions of dollars that the government has pumped into programs to bolster the economy and provide assistance to people who had lost their jobs. The New York Times reported in August that the government had charged 1,500 people with defrauding programs that provide pandemic aid, with more than 450 convictions resulting from the cases. The Small Business Administration’s inspector general’s office has agents going through two million potentially fraudulent loan applications.

For the full story, see:

Benjamin Weiser, Chelsia Rose Marcius and Jan Ransom. “17 Public Workers Are Charged With Stealing Covid Funds.” The New York Times (Thursday, December 1, 2022): A19.

(Note: ellipsis, and bracketed date, added.]

(Note: the online version of the story has the date Nov. 30, 2022, and has the title “17 Public Employees Charged in Schemes to Steal Covid Relief Funds.”)

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