[US] Prison sentence for $337k pandemic relief loan fraudster

In the US, a Tri-Cities woman has been sentenced to a year and three months in federal prison for fraud related to COVID-19 loans intended to support small businesses during the pandemic, Yahoo reports.

In addition, Jimia Rae Cain (52) must pay back the around $337,000 she received in two federal loans.

Ms Cain had previously asked that she be permitted to not repay $265,000 of that figure under a loan forgiveness program.

“I can’t underestimate how serious these offenses are,” Judge Mary K. Dimke said, during a June 29 sentencing hearing in the Richland, Washington, courthouse.

The nation was in crisis during the pandemic and businesses were on the verge of going under, the judge said, and Congress threw a lifeline to small businesses, relying on people’s honesty, to get money to struggling businesses as soon as possible.

The seriousness of Ms Cain’s behaviour was compounded by the fact that loan programs under the Coronavirus Aid, Relief and Economic Security Act, or CARES Act, ran out of money before many deserving small businesses in Eastern Washington could secure federal loans, Judge Dimke said.

Ms Cain reportedly applied for a CARES Act Economic Injury Disaster Loan for her purported company, Americore, in July 2020 and received a low-interest loan for $71,900.

The following month she applied for a CARES Act Paycheck Protection Program Loan and received about $265,000. She later applied to have this forgiven.

According to court documents, in applying for the loans she made fraudulent claims and in some cases fabricated documents to support the claims.

For the larger loan, Ms Cain reportedly claimed to have seven employees and a monthly average payroll of $106,000. She provided written payroll summaries to substantiate this claim and a federal unemployment tax return she created for the loan application.

Americore was not an active business, however, she did not file federal tax returns and had no employees, revenue or payroll prior to 2020, according to court documents.

Ms Cain also claimed that her only prior convictions were for minor vehicle violations but she had multiple other prior convictions, including fraud and multiple gross misdemeanour convictions that made her ineligible for the loans, court documents said.

Her application to have the PayCheck Protection Program loan forgiven was denied in March 2022 because Ms Cain did not submit the required IRS documents. No such documents had been submitted to the IRS.

When Ms Cain finishes her prison sentence she will enter a three-year probation period. She pleaded guilty to a charge of false, fictitious or fraudulent claims.

COVID loan strike force

The Eastern Washington U.S. Attorneys Office reportedly created a strike force to find and combat pandemic-related fraud.

“Holding those accountable who abused these programs is critical to the strength and safety of our community in Eastern Washington,” U.S. Attorney Vanessa Waldref said. “The strike force works to ensure that limited resources are used to protect our local small businesses and the critical jobs and services that they provide for the community.”

The CARES Act provided billions of dollars in aid during the pandemic and the vast majority of relief was not paid back. That includes hundreds of millions of dollars disbursed in Eastern Washington, according to the U.S. attorney’s office.

In addition to the strike force probe, the case was investigated by the Office of Inspector General of the Small Business Administration and the Department of the Treasury Inspector General for Tax Administration.

Source: Yahoo

(Links and quotes via original reporting)

In the US, a Tri-Cities woman has been sentenced to a year and three months in federal prison for fraud related to COVID-19 loans intended to support small businesses during the pandemic, Yahoo reports.

In addition, Jimia Rae Cain (52) must pay back the around $337,000 she received in two federal loans.

Ms Cain had previously asked that she be permitted to not repay $265,000 of that figure under a loan forgiveness program.

“I can’t underestimate how serious these offenses are,” Judge Mary K. Dimke said, during a June 29 sentencing hearing in the Richland, Washington, courthouse.

The nation was in crisis during the pandemic and businesses were on the verge of going under, the judge said, and Congress threw a lifeline to small businesses, relying on people’s honesty, to get money to struggling businesses as soon as possible.

The seriousness of Ms Cain’s behaviour was compounded by the fact that loan programs under the Coronavirus Aid, Relief and Economic Security Act, or CARES Act, ran out of money before many deserving small businesses in Eastern Washington could secure federal loans, Judge Dimke said.

Ms Cain reportedly applied for a CARES Act Economic Injury Disaster Loan for her purported company, Americore, in July 2020 and received a low-interest loan for $71,900.

The following month she applied for a CARES Act Paycheck Protection Program Loan and received about $265,000. She later applied to have this forgiven.

According to court documents, in applying for the loans she made fraudulent claims and in some cases fabricated documents to support the claims.

For the larger loan, Ms Cain reportedly claimed to have seven employees and a monthly average payroll of $106,000. She provided written payroll summaries to substantiate this claim and a federal unemployment tax return she created for the loan application.

Americore was not an active business, however, she did not file federal tax returns and had no employees, revenue or payroll prior to 2020, according to court documents.

Ms Cain also claimed that her only prior convictions were for minor vehicle violations but she had multiple other prior convictions, including fraud and multiple gross misdemeanour convictions that made her ineligible for the loans, court documents said.

Her application to have the PayCheck Protection Program loan forgiven was denied in March 2022 because Ms Cain did not submit the required IRS documents. No such documents had been submitted to the IRS.

When Ms Cain finishes her prison sentence she will enter a three-year probation period. She pleaded guilty to a charge of false, fictitious or fraudulent claims.

COVID loan strike force

The Eastern Washington U.S. Attorneys Office reportedly created a strike force to find and combat pandemic-related fraud.

“Holding those accountable who abused these programs is critical to the strength and safety of our community in Eastern Washington,” U.S. Attorney Vanessa Waldref said. “The strike force works to ensure that limited resources are used to protect our local small businesses and the critical jobs and services that they provide for the community.”

The CARES Act provided billions of dollars in aid during the pandemic and the vast majority of relief was not paid back. That includes hundreds of millions of dollars disbursed in Eastern Washington, according to the U.S. attorney’s office.

In addition to the strike force probe, the case was investigated by the Office of Inspector General of the Small Business Administration and the Department of the Treasury Inspector General for Tax Administration.

Source: Yahoo

(Links and quotes via original reporting)