Woman Charged With $ 2 Million Loan Fraud
LITTLE ROCK – A woman was arrested Thursday for fraudulently obtaining nearly $ 2 million in paycheck protection program loans for small businesses affected by covid-19.
U.S. Attorney Cody Hi-land and Special Agent in Charge Diane Upchurch of the FBI’s Little Rock office said the woman used some of the money to pay off her student loan and to shop online at $ 6,000.
Ganell Tubbs, 41, who claimed to operate businesses called The Little Piglet Soap Company and Suga Girl Customs, has been charged with two counts of bank fraud and misrepresentation on a loan application, and one count of accusation of having engaged in a monetary transaction with the proceeds of an illegal activity. She was indicted by a federal grand jury a week ago, but the indictment remained sealed until her arrest Thursday.
“Many businesses across Arkansas are struggling to stay open during this Covid-19 pandemic, so our office has zero tolerance for anyone who fraudulently abuses federal funds meant to help businesses get through this difficult time,” said Upchurch said in a press release. She added, “Along with our federal and state partners, we will remain vigilant against fraudsters and ensure that P3 funds are used as intended. “
According to the announcement, Tubbs submitted an application through the program on April 30, representing Suga Girl Customs had paid $ 1,385,903 in salaries and allowances during the first quarter of 2020. She was approved for a loan of 1,518,887. $ and received the money on May 5.
Two days later, according to the indictment, she used the proceeds to make an $ 8,000 payment on her student loan and, the following week, spent about $ 6,000 shopping online at retailers like Apple, Michael Kors, Sephora, North-face and Nike.
On May 5, Tubbs submitted another bogus loan application on behalf of Little Piglet Soap Company, through which she received a loan of $ 414,375.
“These loans are meant to help small business owners who have suffered economically from the Covid-19 closures,” Hiland said.
The guaranteed forgivable loans were made available to small businesses under the Coronavirus Aid, Relief and Economic Security Act, also known as the CARES Act, which was enacted on March 27 to provide financial assistance to emergency to millions of Americans suffering financial effects. of the covid-19 pandemic.
Initially, Congress authorized up to $ 349 billion in loans to the small business administration under the program. In April, Congress authorized more than $ 300 billion in additional funding.
To obtain such a loan, a small business must submit an application signed by an authorized representative of the business, recognize the rules of the program and make certain certifications, such as the amount of its monthly payroll expenses and its number of employees. The company must also provide documentation of payroll expenses.
The loan proceeds must be spent on salary charges or interest on mortgages, rent or utilities.
The indictment says none of the businesses Tubbs listed are in good standing with the Secretary of State’s office and both list his Herndon Road address as their address.
Tubbs appeared on Thursday before US investigating judge Tom Ray, who released her on bail.
The investigation that led to his arrest was carried out by the FBI, the Office of the Inspector General of the Small Business Administration and the US Treasury Inspector General for Tax Administration.
The case is being pursued by Assistant U.S. Prosecutors Pat Harris and Jamie Dempsey.