In March 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act to provide emergency financial assistance during the pandemic. The CARES Act included funding in the form of loans to eligible businesses—intended to be used to help keep the lights on. Unfortunately, these loans also proved to be magnets for fraud. Since then, officials have been working to identify and prosecute those who took advantage of the program.
Guilty Plea
Last week, Arashio Harris, a Corrections Sergeant with the Miami-Dade Corrections and Rehabilitation Department, pleaded guilty to wire fraud in connection with his fraudulent applications for two Paycheck Protection Program (PPP) loans, two Economic Injury Disaster Loans (EIDL), and an EIDL advance. Harris entered his guilty plea in Miami, Florida, before Chief U.S. District Judge Cecilia M. Altonaga.
PPP
The PPP was an SBA-backed loan that helped businesses keep employees working during the pandemic. There were two draws available, depending on timing and the criteria. The loans qualified for full loan forgiveness if, during the covered period following the loan disbursement, the business maintained employee and compensation levels, and the loan proceeds were spent on payroll costs and other eligible expenses. At least 60% of the proceeds must have been spent on payroll costs.
Facts
According to the facts admitted with his plea, Harris was the owner and president of two companies, The Good Family Property Solutions Inc. and Flying Lions LLC. On April 3, 2020, working with an associate, Harris submitted a fraudulent application in the name of Good Family, seeking an EIDL and an EIDL advance. Harris falsely claimed that for the 12-months before Jan. 31, 2020, Good Family had gross revenues of approximately $130,000 and nine employees. As a result, Good Family obtained a $9,000 EIDL advance that did not need to be repaid and $14,500 in EIDL loan proceeds.
