When the Trump Administration pushed the Paycheck Protection Program (PPP) as part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) in 2020, it was widely praised as a godsend for businesses and their employees at a time when the COVID-19 pandemic created the worst unemployment rates since the Great Depression.
PPP became an instantly recognized acronym.
Today, more than two years later, it is known for something else: The biggest fraud in a century according to one former U.S. Attorney.
According to research conducted by the University of Texas, $76 billion of the nearly $800 billion in PPP loans — 1.8 million of the 11.8 million PPP loans processed — were used for illicit purposes.
Cases of fraud have been exposed throughout the country, including here in the Golden Triangle.
In May, Chris Lick of Starkville, whose businesses including Grassroots Natural Candle Company in Columbus, pleaded guilty to a charge that he had fraudulently spent $6.1 million in PPP loan funds.
Now, based on federal indictments released Wednesday, it appears a second case of PPP fraud has been uncovered in Columbus.
Columbus business partners Jabari Edwards and Antwann Richardson have been indicted by a federal grand jury for multiple charges related to misusing more than $2 million in PPP and another federal COVID loan called the Economic Injury Disaster Loan Program.
Edwards and Richardson are each charged with one count of conspiracy to commit wire fraud, three counts of wire fraud and seven counts of money laundering. Edwards also is charged with two counts of making false statements.
It’s worth remembering that Edwards and Richardson are presumed innocent until proven guilty, but the claims in the indictment certainly tell a story of deliberate, even reckless, fraud. The allegations contained in the indictment are not a result of sloppy bookkeeping or a misinterpretation of how the funds could be spent. PPP loan money was allegedly spent on the purchase of Court Square Towers, personal real estate transactions, political contributions, charitable donations, loan payments for vehicles, and lump sum payments to friends, families and employees of their other companies.
The sight of numerous black SUVs with blue lights flashing surrounding Court Square Towers during a Thursday morning raid at the building was a disturbing scene, certainly.
No doubt, such scenes have been unfolding all across the country.
The sad reality is that where you have federal programs, you will have fraud.
Unfortunately, some use these instances as a reason to cut back or eliminate assistance programs. Let’s not lose sight of the fact that PPP, like other assistance programs, provided crucial aid at a crucial time for a lot of businesses.
That includes The Dispatch, whose PPP loan covered salary and benefits for our employees. The program was intended to keep people employed while the world ground to a halt. In our case, PPP loans allowed us to continue employing our sports reporting staff — repurposing them as news reporters — even though no sporting events were being held.
We are hardly unique. Without these funds, countless local businesses may have been forced to severely cut back or shutter their businesses altogether, resulting in lost wages and devastation for our communities.
We expect authorities to investigate and prosecute fraud and while much of the $76 million in PPP fraud cases may never be recovered, the motives behind the PPP program are honorable and the benefits really beyond calculation.
Even as the shock from this most recent case remains, we should not lose sight of that.
The Dispatch Editorial Board is made up of publisher Peter Imes, columnist Slim Smith, managing editor Zack Plair and senior newsroom staff.