More PPP fraud investigations underway in metro BR

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Published: Feb. 24, 2022 at 11:27 AM CST
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BATON ROUGE, La. (WAFB) - U.S. Attorney Ronald Gathe confirms his office is currently prosecuting six additional cases of alleged fraud in metro Baton Rouge connected to the Paycheck Protection Program (PPP).

The office, which covers the Middle District of Louisiana, did not provide any further information about the six cases under investigation.

A November 2021 report by WAFB-TV focused on possible widespread fraud connected to the program, which is designed to keep business owners afloat during the COVID-19 pandemic.

A portion of that WAFB report focused on the large number of PPP loans requested by people in Gonzales, La. who claimed to own barbershops.

Federal investigators want you to speak up about PPP Fraud

In the city of Gonzales, there were 70 people claiming to own a barbershop who applied for loans. The amounts of the loan requests varied from less than $2,000 to more than $20,000. Nearly a dozen of those people took out two loans. All totaled, in that city of just 43,000 residents, lenders approved $1.3 million dollars for people there who claimed to be barbershop owners, records show.

The largest loan paid out for Gonzales barbershops was $20,833. Lenders approved that amount for eight people, seven of whom got checks. One of those people actually got paid twice.

However, a WAFB check of public records for business licenses with the Secretary of State’s office revealed no active business licenses for those eight individuals. At the request of WAFB, the Louisiana Board of Barber Examiners also searched their apprentice, student, barbershop records for those eight names and addresses, and came up empty as well.

U.S. Senator John Kennedy, interviewed for our report, said the potential fraud was like “looting after a hurricane.”

“I don’t know why it is that that some people take advantage of a program like this in a time of crisis. And I, I think we ought to prosecute every single one of them to the full extent of the law,” said Kennedy.

U.S. Attorney Gathe’s office has successfully prosecuted at least one case tied to PPP fraud. April R. Falgoust, age 46, of Prairieville, La., was sentenced to 18 months in federal prison following her conviction for wire fraud late last year. She was also ordered to pay $147,925.69 in restitution and forfeit an additional $143,800 in proceeds from her crime.

Falgoust filed five fraudulent applications tied to the COVID-19 Relief Program. She misrepresented the number of employees, gross revenue, and COVID-19 costs tied to five different companies.

At the time of Falgoust’s conviction, Gathe said preventing and prosecuting fraud is a top priority of his office.

“This sentence should serve as a warning to those who would commit such crimes that we will bring offenders to justice and punish those who break the law,” Gathe said in December 2021.

FBI New Orleans Special Agent in Charge Douglas A. Williams said that Falgoust’s conviction should “serve as [a] reminder to those who deceive and steal from hardworking Americans that they will be held to account for their actions.”

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