Philadelphia business owner accused of pocketing $ 1 million in PPP loans
Former Philadelphia man accused of stealing nearly $ 1 million in loans meant to help small businesses survive the pandemic, spending the funds on diamond rings, a new car and a house in Florida , according to federal prosecutors.
Devron Brown, 50, fraudulently received $ 937,500 in June 2020 under the Paycheck Protection Program (PPP), the federal repayable business loan program, claims the U.S. Attorney’s Office for the Eastern District of Pennsylvania. Brown was arrested and charged with two counts of bank fraud and nine counts of money laundering.
In an email, Brown said his lawyer couldn’t respond before The Inquirer’s deadline for publication. He did not respond to a follow-up email asking if he could comment before a later deadline.
READ MORE: Here are 8 things small businesses need to know about P3s.
Earlier this month, the US Department of Justice said it had prosecuted more than 100 defendants in more than 70 criminal cases related to PPP fraud. The department had recouped more than $ 65 million in cash from fraudulently obtained PPP funds, as well as real estate and luxury items purchased with these products.
That’s a tiny fraction of the 11.8 million approved loans totaling nearly $ 800 billion under the program as of May 31, according to the Small Business Administration. 1% interest loans are intended to cover salary costs, interest on mortgages, rent or utilities. Loans can be canceled if companies spend the proceeds of those expenses within a specified time frame and use a certain percentage of the payroll.
Brown, whose last known address is in Florida, was the president and owner of construction company Just Us Construction Inc., whose Philadelphia business license expired in 2018, according to an indictment filed this month. . The indictment says that a PPP application for the company contained false information about the number of employees, the salaries paid to them and payroll taxes. For example, the app said the company paid payroll taxes for 25 Pennsylvania workers, but was paying none for state employees during that time, according to the indictment.
READ MORE: For P3s Loans, Small Business Owners Should Stop And Think Before Asking For Pardon
Brown also certified that the money would be used to detain workers and cover company costs, according to the indictment. Instead, prosecutors allege Brown embarked on an epic spending spree, purchasing a Florida residential property ($ 250,000), a Lexus GS 350 ($ 42,785) and two 14k white gold rings. ($ 6,318). The indictment says he also bought a pickup truck, a motorcycle and an excavator.
“The thieves who try to take these funds take advantage of the misfortune of others – scam them while scamming all the taxpayers who fund the program,” Acting US Attorney Jennifer Arbittier Williams said in a statement. “As alleged, Brown fraudulently obtained nearly $ 1 million in funds that could have helped struggling businesses and individuals.”
Brown reportedly tried to get more PPP money. Authorities claimed he was responsible for a second fraudulent loan application for roughly the same amount of money in early 2021. This request was denied.