Two women face prison for stealing more than 800K from pandemic loan program
Crime Two women face prison for stealing more than 800K from pandemic loan program
Two Florida women face prison time for stealing more than $800,000 from pandemic loan program, including a former SBA employee.
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As the coronavirus swept across the country, two South Florida women teamed up to steal more than $800,000 in federal government loans that were meant to help small businesses survive the economic collapse during the public health crisis.
Raisha Kelly, 44, of Palm Beach County, was sentenced on Friday to five years in prison after being found guilty of multiple counts of wire fraud by submitting falsified tax returns on loan applications in Miami federal court. She was also ordered to reimburse $443,895 to the Small Business Administration, which guaranteed the pandemic loans through the agency's Paycheck Protection Program.
Malaina Chapman, a former employee of the Small Business Administration who collaborated with Kelly and five others, pleaded guilty to a conspiracy to commit wire fraud in March. Chapman, 37, of Hialeah, faces sentencing in June.
Since Congress adopted the pandemic relief program run by the SBA, South Florida has been a hotbed of PPP loan fraud.
Business people, law enforcement officers and others have been convicted of stealing millions from the government program by fabricating loan applications for their companies. Several used their ill-gotten loans to buy Lamborghinis, Teslas, Porsches and other expensive cars.
READ MORE: Lambos. Jewels. How 'easy money' from Uncle Sam made Miami a feast for PPP fraudsters
Chapman was employed as a disaster relief specialist with the Small Business Administration from Sept. 28, 2020, through her resignation on March 18, 2021, according to court records. During her employment, Chapman fleeced the Paycheck Protection Program and Economic Injury Disaster loan programs as well credit unions and pandemic-related rental programs, according to federal court records.
First ex-SBA employee charged
Chapman was the first ex-SBA employee in the country to be charged with bilking the agency responsible for doling out $800 billion in PPP and other pandemic loans, according to federal authorities. Chapman advertised her side businesses in real estate and credit services on her Instagram account under the handle, upscale_yourhomegirl.
Malaina Chapman was the first ex-SBA employee in the country to be charged with bilking the federal agency responsible for the nation's pandemic loan programs.
Instagram
Chapman was accused of helping Kelly and five other members of a South Florida ring with their bogus PPP loan applications, leading to disbursements of hundreds of thousands of dollars in 2021 by private lenders backed by the SBA.
With the exception of Kelly, five members of the ring agreed to plead guilty to charges of fraudulently receiving more than $800,000 in PPP loans, court records show. Chapman and Kelly received kickbacks from loan applicants, according to prosecutors with the U.S. Attorney's Office in Miami.
In addition, on Feb. 10, 2021, Chapman submitted a PPP loan application in the name of her company, Upscale Credit Lounge, which included a falsified tax document that reported revenue of $103,674 and a profit of $81,860. Eleven days later, a private lender approved another loan for $17,052, according to court records.
On Feb. 19, 2021, Chapman, again while still employed by the SBA, submitted another PPP loan application for her business, DA TRAP. Chapman claimed that she had four employees and an average monthly payroll of $14,191. As backup material, Chapman submitted four IRS Employers Quarterly Tax Return forms, which documented the wages paid by DA TRAP. A week later, a private lender approved a loan for $35,477.
All of the information in her application was fabricated, authorities said.
In a similar manner, on April 10, 2021, Chapman submitted another PPP loan application for a property management business, falsely claiming on a tax form that it generated revenue of $123,950 with profits of $78,187, court records show. Five days later, a private lender approved that loan for $20,833.
In addition to defrauding the PPP program, Chapman was also accused of exploiting the State of Florida and the City of Miami's COVID-19 Emergency Rental Assistance programs.
On Oct. 13, 2021, Chapman began the process of applying for benefits under Florida's Emergency Rental Assistance program. Chapman pretended to be a tenant at a residence in Miami, according to court records. She submitted information and documents through an online portal set up to distribute benefits.
On Jan. 20, 2022, Chapman submitted a written document titled '3-day notice to pay rent or quit.' The document was dated Dec. 7, 2021, showing it was signed by Chapman's mother. But her mother died the previous year on May 25, 2020.
Nonetheless, the state accepted Chapman's misrepresentations and approved payments totaling $15,000. They were made into her bank account, according to authorities.
The PPP fraud cases, investigated by the U.S. Postal Inspection Service and other federal agencies, were prosecuted by assistant U.S. attorneys Daniel Bernstein, Eduardo Gardea Jr., and Gabrielle Charest-Turken.
Jay Weaver
Miami Herald Go to X Email this person 305-376-3446
Jay Weaver writes about federal crime at the crossroads of South Florida and Latin America. Since joining the Miami Herald in 1999, he's covered the federal courts nonstop, from Elian Gonzalez's custody battle to Alex Rodriguez's steroid abuse. He was part of the Herald teams that won the 2001 and 2022 Pulitzer Prizes for breaking news on Elian's seizure by federal agents and the collapse of a Surfside condo building killing 98 people. He and three Herald colleagues were 2019 Pulitzer Prize finalists for explanatory reporting on gold smuggling between South America and Miami.
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