The Department of Justice’s Criminal Division says it has found dozens of instances of attempts to steal money from the Payment Protection Program set up to help small business owners pay their employees in the wake of economic hardship brought on by the Covid-19 pandemic.

In all, the DOJ Criminal Division’s Fraud Section has brought charges against 57 defendants since early May, representing more than $175 million borrowed from the PPP, which has approved 5.2 million loans for a total of more than $525 billion, according to a statement released by Acting Assistant Attorney General Brian Rabbitt.

Rabbitt says the unit found PPP fraud perpetrated by individuals or small groups, who used the money on “splashy luxury items for themselves" instead of paying their employees, as well as by “coordinated criminal rings that have engaged in systematic, organized conduct to loot the PPP.”

Among the latter, Rabbitt points to charges filed against 11 individuals in Cleveland and Miami, including a professional athlete and his business manager. The group allegedly falsified records and used fraudulent applications to obtain $24 million in total PPP loans, Rabbitt says in the statement.

Rabbitt also praised financial services firms that have assisted with the investigation. 

“Many financial institutions have been strong partners in assisting us in detecting and investigating potentially fraudulent activity in connection with the PPP and other government aid programs and safeguarding taxpayer dollars by freezing funds and accounts,” he says in the statement.   

FA-IQ found last month that at least 1,000 firms offering financial advice received PPP loans of $150,000 or more each.

An earlier analysis of SEC disclosures by FA-IQ sister publication FundFire found that some of the wealth management practices that obtained the loans had black marks on their records. In one case, a Chicago-based broker-dealer that took a loan of between $1 million and $2 million had eight disclosures on its record over the past decade.

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