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When it becomes routine for government to dole out taxpayer money with reckless abandon, it evidently becomes rather easy to commit fraud against it. A Florida man has joined the list of countless ne’er-do-wells who have been found to have falsified documents and received massive sums of money associated with COVID-19 relief funds.
Valesky Barosy, 27, of Fort Lauderdale, allegedly submitted loan applications for more than $4.2 million under the Paycheck Protection Program (PPP) using documents with falsified prior year-end expenses, net profit, payroll, and IRS tax forms, The Hill reported. Barosy and his accomplices ended up receiving around half of the $4.2 million and proceeded to pull a “Goodfellas” no-no and attract as much attention to themselves as they possibly could, purchasing a Lamborghini Huracan EVO, watches from Rolex and Hublot, and designer clothing from Louis Vuitton and Gucci.
Barosy is charged with five counts of wire fraud, three counts of money laundering, and one count of aggravated identity theft. If convicted, he could face up to 132 years in prison. The alleged fraudster, however, is not a pioneer of the scheme. Since its inception, a myriad of individuals have been charged with fraudulently receiving PPP funds and, with the expectation that more will follow, Attorney General Merrick Garland in May launched the COVID-19 Fraud Enforcement Task Force to investigate COVID-related fraud. The House Select Subcommittee on the Coronavirus Crisis also augmented its own investigation into PPP fraud.
“I am deeply troubled by reports alleging that financial technology (FinTech) lenders and their bank partners failed to adequately screen PPP loan applications for fraud,” Rep. James Clyburn (D-SC), chair of the committee, said at the time. “This failure may have led to millions of dollars worth of FinTech-facilitated PPP loans being made to fraudulent, non-existent, or otherwise ineligible businesses.”
There are a number of notable cases in the same criminal vein.
As BPR reported, in August of 2021, the daughter of a former mayor of Broward County, Florida, was accused of defrauding the federal COVID-19 relief program. Damara Holness, 28, lied to get $300,000 in forgivable Paycheck Protection Program (PPP) loan money from the federal government, according to WSVN-TV of Miami.
Her father, Dale Holness, was elected mayor of Broward County in 2019, presided over the county during the first year of the pandemic, and is now a 2022 Democratic candidate for a U.S. House seat in the state’s 20th Congressional District.
Federal investigators said Damara Holness used her father’s campaign headquarters as her business address on her June 2020 PPP loan application. They added that she falsely stated that her now-revealed phantom company, Holness Consulting, had 18 employees and had an average monthly payroll of $120,000.
In an earlier case, in February of 2021, it was revealed that the Small Business Administration (SBA) hid communications it had with Planned Parenthood after GOP lawmakers called for an investigation into the $80 million in loans given to the supposedly non-profit organization and its affiliates, alleging the loans were obtained illegally.
“Americans have a right to know why their tax dollars went to Planned Parenthood’s abortion clinics instead of struggling small businesses, non-profits, and churches,” Sen. Tom Cotton (R-AR) said at the time.
“The Small Business Administration ought to disclose how Planned Parenthood affiliates gamed the system to illegally receive PPP loans—and then refer those affiliates to the Department of Justice for prosecution,” the Arkansas Republican continued.
That same month, the Florida Democrat Party announced it was out of money and millions behind their state Republican rival when it was discovered that the party withheld, for its own use, funds that were meant for small businesses in the state.
Peter Schorsch, the publisher of FloridaPolitics.com, had investigated the claims at the time.
“Florida Democrats took a $780,000 PPP loan that they should never have received and ended up having to return. It was used in at least 10x that worth of attacks on their candidates throughout the state. I hope that building fund was worth it,” he wrote.
Florida Democrats took a $780,000 PPP loan that they should never have received and ended up having to return.
It was used in at least 10x that worth of attacks on their candidates throughout the state.
I hope that building fund was worth it.
— Peter Schorsch (@PeterSchorschFL) November 4, 2020
BPR reported at the time that, according to Federal Election Commission data posted by ProPublica, the state Democratic Party had about $60,931 in cash on hand, with more than $868,000 in debts after $1,122,753 in total receipts and $1,218,461 in expenditures for the period between Nov. 24 and Dec. 31, 2020.
Meanwhile, the Florida Republican Party had more than $5.8 million in cash on hand at the time of the report, according to FEC data, after receiving $75,676 and spending $176,142 in the period between Dec. 17 and Dec. 31, 2020.
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