A man from Texas has been charged under allegations of filing bank loan applications fraudulently seeking over $5m.
The loans applications were in forgivable loans guaranteed by the Small Business Administration under the Coronavirus Aid, Relief, and Economic Security (CARES) act.
Samuel Yates, 32, has been charged with two counts of wire fraud. The court claims Yates sought the loans from two separate banks by claiming to have more than 400 employees earning wages, when no employees worked for his purported business.
The court documents, which were unsealed in the US District Court in Texarkana, alleges Yates sought $5m from the first bank by claiming to have 400 employees with an average monthly payroll of over $2m.
In the second application, Yates claimed to employ 100 individuals and was able to obtain a loan over $500,000.
The documents accuse that Yates submitted a list of supposed employees that he obtained from a publicly available random name generator on the internet. He also submitted forged tax documents with each application.
The CARES act was enacted in March 2020 and is designed to offer emergency financial assistance to millions of Americans suffering from the Covid-19 pandemic.
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