Georgia Woman Sentenced to 3 Years Over a Covid Fraud Scheme
The woman, who fraudulently obtained more than $6 million in Covid relief money, is the latest example of Americans misusing the Paycheck Protection Program.
A woman in Georgia who fraudulently obtained more than $6 million in Covid relief money was sentenced to more than three years in prison on Tuesday, the Justice Department said.
The case is the latest example of Americans misusing the Paycheck Protection Program, a part of the $2.2 billion Coronavirus Aid, Relief and Economic Security Act that Congress passed in March 2020.
In the latest case, the Georgia woman, Hunter VanPelt, pleaded guilty to bank fraud in August after submitting six loan applications for a total of more than $7.9 million on behalf of companies that she owned or controlled, prosecutors said.
Prosecutors say that Ms. VanPelt, 49, whose legal name was Ellen Corkrum until 2016, lied about payroll expenses and the number of people her companies employed. She also submitted fraudulent tax records, payroll reports and bank statements, they said. Her lawyer could not be immediately contacted for comment overnight.
The Justice Department said on Tuesday that it had recovered about $2.1 million of the $6 million that Ms. VanPelt received through the program. It said a bank had also seized and returned an additional $1.6 million.
The giant loan program, which ran intermittently from April 2020 to May 2021, relied on banks and other lenders. To speed the lending process, the federal government waived much of the vetting that lenders traditionally do on business loans.
The program has been highly susceptible to fraud. Researchers at the University of Texas at Austin estimated in August that about $76 billion of its $800 billion in loans might have been taken improperly. (They also made a more conservative estimate of $38 billion.)
The Justice Department said on Tuesday that it had prosecuted more than 150 defendants so far and seized more than $75 million in cash derived from fraudulent loans through the program, along with properties and luxury items.
Last month, a former New York Jets wide receiver, Joshua J. Bellamy, was sentenced to 37 months in prison after he fraudulently obtained more than $1.2 million through the Paycheck Protection Program for a company that he owned.
Prosecutors said that Mr. Bellamy had spent more than $100,00 of the funds on luxury goods from Dior, Gucci and other brands. He pleaded guilty in June to conspiracy to commit wire fraud.