A Texas man flagged in a 2020 Miami Herald investigation whose companies were approved for millions in suspicious loans through the Paycheck Protection Program has been charged with multiple counts of wire fraud and making false statements to a bank.
The federal charges in the Eastern District of Texas stem from three loans received by companies tied to Sinoj Joseph that totaled more than $3 million.
The program was one of the signature relief programs passed by Congress in response to the COVID-19 pandemic and offered small business loans up to $10 million that were forgivable if used for payroll and other approved expenses.
The program was designed to support existing businesses and several companies tied to Joseph appeared to have been created after the date by which companies were required to be in existence to qualify for the program. The Herald also found that several of the companies featured nearly identical websites touting the same services.
If convicted, Joseph faces up to 20 years in prison on the wire fraud charges and up to 30 years in prison on the charges of making false statements to a bank.
The Herald’s reporting, done in partnership with the nonpartisan Anti-Corruption Data Collective, flagged more than 200 questionable PPP loans awarded to newly created businesses and other seemingly ineligible recipients, including multiple companies that were owned by people facing felony criminal charges, which was disqualifying.
A large share of the loans flagged in the Herald’s reporting were approved by non-bank financial technology, or FinTech, companies, and the Herald’s reporting was cited by the House Select Subcommittee on the Coronavirus Crisis when it launched an investigation into the role of the FinTech industry in PPP fraud.
While the small business aid program administered by the U.S. Small Business Administration, which doled out nearly $800 billion in loans, undoubtedly kept millions of businesses afloat, it was also plagued by fraud. The Office of Inspector General of the Small Business Administration, for example, found in January that nearly 55,000 loans worth roughly $7 billion went to businesses that were created after the eligibility date, reported too many employees or were too big to qualify for the program.