A Georgia woman pleaded guilty today in the Northern District of Georgia for engaging in a scheme to fraudulently obtain more than $ 7.9 million in Paycheck Protection Program (PPP) loans granted by the Small Business Administration (SBA) as part of the Coronavirus Aid, Help and Economic Security Guaranteed (CARES) act.
According to court documents, Hunter VanPelt, aka Ellen Corkrum, 49, of Roswell, filed six fraudulent PPP loan applications with four different lenders on behalf of companies they owned or controlled, namely: Georgia Nephrology Physician Associated, United Healthcare Group & Co., Nephrology Network Group LLC, First Corporate International, Corkrum Consolidated Inc., and Kiwi International Inc. Through the six PPP loan applications, VanPelt fraudulently searched for more than $ 7.9 million in PPP loan funds, of which over $ 6 million were paid to accounts held by VanPelt.
VanPelt incorrectly reported the number of employees and labor costs in each of the six PPP loan applications. To aid the fraudulent PPP loan applications, VanPelt submitted fraudulent tax records, bank statements and pay slips. VanPelt, which changed its name from Ellen Corkrum to Hunter VanPelt in July 2016, submitted three of the PPP loan applications under the VanPelt name and three other PPP loan applications under the Corkrum name.
The Department of Justice, in collaboration with law enforcement partners, has seized and recovered approximately $ 2.1 million of the PPP funds disbursed in the matter. Another $ 1.6 million of the disbursed PPP funds were confiscated by a bank and returned to the lender.
"VanPelt has outrageously exploited this devastating national emergency for personal gain and is now being held accountable for their fraudulent conduct," said Assistant Attorney General Kenneth A. Polite Jr. of the Department of Justice's Criminal Police Department. “PPP funds should be reserved for legitimate companies and their hardworking employees who have suffered economically from the pandemic. The Justice Department is working to ensure that anyone using COVID-19 relief programs is brought to justice.
"The Paycheck Protection Program helps companies keep their employees busy during the COVID-19 crisis," said Acting US Attorney Kurt Erskine for the Northern District of Georgia. "When these funds are diverted through fraud, as in this case, the workers and the companies that employ them unfortunately suffer."
"The paycheck protection program is the key to survival for many small businesses during the COVID-19 crisis," said special agent Chris Hacker of the Atlanta FBI. “It is particularly worrying that anyone would seek to capitalize on a federal program at the expense of these companies. The FBI will continue its efforts to stop such fraud. "
"To support small and community banks, Federal Home Loan banks can accept Paycheck Protection Program (PPP) loans as collateral when granting loans to their members," said Edwin S. Bonano, Special Envoy for Federal Housing Finance Agency, Office of Inspector General. “The Office of Inspector General is proud to work with our law enforcement partners to prevent, detect, and deter attempted fraud in the Federal Home Loan Bank System, and to steal the support that small business owners and employees need as part of this important part of the CARES law. "
VanPelt pleaded guilty to bank fraud. She is due to be sentenced on January 4, 2022 and faces a maximum sentence of 30 years in prison. A federal district court judge will determine each sentence based on U.S. sentencing guidelines and other legal factors.
The FBI and the FHFA-OIG are investigating the case.
Trial Attorney Chris Wenger of the National Rapid Response Strike Force of the Criminal Fraud Division and Assistant Attorney General Christopher Huber, Assistant Director of Complex Fraud for the Northern District of Georgia, are prosecuting the case.
The fraud department oversees the prosecution of attempts at fraud that exploit PPP. In the months since the PPP began, fraud attorneys have prosecuted more than 100 defendants in more than 70 criminal cases. The fraud department has also confiscated more than $ 65 million in cash proceeds from fraudulently obtained PPP funds, as well as numerous real estate and luxury goods acquired with those proceeds. Further information can be found at: https://www.justice.gov/criminal-fraud/ppp-fraud.
In May, the Attorney General established the COVID-19 Fraud Enforcement Task Force to mobilize the Justice Department's resources in collaboration with government agencies to step up efforts to combat and prevent pandemic-related fraud. The task force supports efforts to identify and prosecute the most guilty national and international criminal actors and assists authorities charged with managing fraud prevention aid programs by, among other things, expanding and integrating existing coordination mechanisms, identifying resources and techniques, to detect fraudulent actors and their systems; and to share and use information and intelligence gained from previous enforcement efforts. For more information on the department's response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about suspected COVID-19 fraud can report this by calling the Department of Justice's National Center for Disaster Fraud hotline at 866-720-5721 or using the NCDF web complaint form at: https: / /www.justice. gov / disaster-fraud / ncdf-disaster-complaint-form.