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Sunday, July 14, 2024

Charlotte business owner indicted in $1.2 million COVID-19 relief fraud scheme

A federal grand jury has indicted a Charlotte business owner on charges he schemed more than $1.2 million from the government’s COVID-19 relief funds.

Glynn Paul Hubbard Jr., 45, faces wire fraud and money laundering charges related to more than $1.2 million in fraudulent Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) program loans for himself and his customers, according to the U.S. Attorney’s Office.

From March 31, 2020, to Aug. 1, 2020, Hubbard allegedly submitted fraudulent PPP loan and EIDL applications to the Small Business Administration and SBA-approved lenders to obtain relief funds for his businesses, Borrow My Ride, Balanced Society Corp.,, The Regins Corp., and GGGAB Inc.

Hubbard falsified information in loan applications and provided false financial information, fake employment data and fraudulent tax returns for his businesses, according to the indictment.

Hubbard received more than $570,000 in fraudulently obtained relief funds, according to the indictment.

Hubbard also executed the scheme by submitting false and fraudulent applications for PPP and EIDL funds on behalf of customers, causing more than $660,000 in relief funds to be disbursed to his customers. Hubbard allegedly promoted the fraudulent scheme through personal referrals and in social media posts where he advertised that he was a PPP loan/EIDL consultant, according to the indictment.

Hubbard received improper loan preparer fees for his services totaling more than $150,000. To avoid detection, he allegedly required customers to pay the loan preparation fees in cash, via cashier’s checks, or wire transfers, according to the indictment.

The wire fraud charge carries a maximum prison sentence of 20 years and a $250,000 fine. The maximum statutory penalty for the money laundering offense is 10 years in prison and a $2500,000 fine.

Over the course of the pandemic, SBA disbursed approximately $1.2 trillion of COVID-19 Economic Injury Disaster Loan and Paycheck Protection Program funds. In the rush to swiftly disburse COVID-19 EIDL and PPP funds, SBA calibrated its internal controls and the agency weakened or removed the controls necessary to prevent fraudsters from easily gaining access to these programs and provide assurance that only eligible entities received funds, according to the Small Business Administration.

The SBA estimates it disbursed more than $200 billion in potentially fraudulent COVID-19 EIDLs, EIDL Targeted Advances, Supplemental Targeted Advances, and PPP loans. This means at least 17% of all COVID-19 EIDL and PPP funds were disbursed to potentially fraudulent actors, according to the SBA. Federal investigations has led to almost $30 billion being seized or returned to the Small Business Administration.

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