If you are one of the thousands of people who fraudulently applied for a Paycheck Protection Program or PPP loan under the CARES Act, pay attention! This blog post is going to explain why you should return the money and surrender. The CARES Act provided $349 billion in forgivable loans that a business could use to cover payroll, mortgage interest, rent, lease or utilities during difficult times of the pandemic. But many people think they can simply steal that money without ever paying a penalty.
Let’s take as an example the case of Zsa Zsa Bouvier Couch, whose case has just been unsealed in the Middle District of Alabama.
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Zsa Zsa is a Montgomery area entrepreneur. She operated seven businesses, according to the Alabama Secretary of State:
- Trinity Christian Ministry, LLC, incorporated March 26, 2008.
- Kidz Academy Christian Child Care Center, Inc, incorporated as a non-profit corporation on JUNE 12, 2007.
- Bouvier Hair Boutique LLC, incorporated on January 22, 2008.
- Slim Fit I Inc weight loss medical clinic and spa, incorporated on April 7, 2020.
- Zsa Zsa’s Boutique, LLC, incorporated on MAY 02, 2020.
- ABC Christian Ministries, LLC, incorporated January 22, 2008.
- Walters Academy Corporation, incorporated on MAY 26, 1999.
Kidz Academy opened a new Regions Bank current account on JUNE 25, 2019.
Bouvier Hair opened a new current account at Banque des Régions on MAY 7, 2020.
Slim Fit opened a new Trustmark current account on April 22, 2020.
Kidz Academy opened a new Trustmark current account on MAY 6, 2020.
It’s PPP loan time!
Then the PPP loan applications began. To apply for a PPP loan, the applicant must tell the bank what their average monthly payroll was and how many employees they have. One of the checks to compare application information to bank account history. For example, if I regularly issue a payroll of $20,000 per month and state on the PPP loan application that I have a payroll of $90,000 per month, I will quickly get caught. Zsa Zsa may have thought that by opening new checking accounts, the bank would not be able to see her previous payroll information.
On April 22, 2020, Zsa Zsa requested $206,041.68 from Trustmark, claiming that Slim Fit had 10 employees and an average payroll of $82,416.67.
To complete the application, she was required to certify that the business existed on February 15, 2020, and that the funds received would only be used as permitted by the CARES Act. She also had to disclose that this was the only PPP loan she was applying for and that she did not own or operate any other businesses.
Since SlimFit was incorporated AFTER February 15, 2020 (April 22, 2020), it was pretty easy to detect. Opening a new checking account and then applying for a PPP loan the same day with your new bank is also kind of a risky move… but… she got the loan! For more than she asked for! $248,125.00!
On April 23, 2020, Zsa Zsa requested $122,479.18 from Trustmark, claiming that Trinity also had 10 employees, but had an average monthly payroll of $48,991.67. Winning move certifying TO THE SAME BANK that you have no other activities, even though you have just deposited THE EVE for another company. But…she got the loan (but only for $95,625.00).
On April 23, 2020, Zsa Zsa also requested $186,664.38 from Trustmark for a third business, Kidz Academy. She said they had 10 employees and a monthly payroll of $74,665.75. And…she got the loan (for $83,437.47).
Since things were going so well, Zsa Zsa decided to ask Trustmark for $964,371.88 for Zsa Zsa’s store. She claimed she had 30 employees and an average monthly payroll of $385,748.75. This time, the Alabama Department of Labor informed Trustmark that ZZB had no employees. When Trustmark informed Zsa Zsa of this, she responded “Just remove the application.”
This application was withdrawn on MAY 4, 2020, but his Kidz Academy PPP loan was approved on MAY 11, 2020, his Trinity application was approved on MAY 4, 2020, and his Slim Fit application was approved on JUNE 3, 2020.
So after stealing $427,187.47 from American taxpayers through Trinity Bank, she realized the job was done at Trinity and decided to start stealing through Regions Bank.
On MAY 5, 2020, just one day after learning that the Alabama Department of Labor was after her and that her boldest PPP loan application had been denied, Zsa Zsa went to Regional Bank and filed a PPP loan for Kidz Academy. This time, she claimed to have 15 employees with a monthly payroll of $120,000 and asked for $66,700.00. The regions approved the loan for the full amount.
On June 3, 2020, Zsa Zsa applied to Regions for a PPP loan for Bouvier Hair, saying she had 10 employees and an average monthly payroll of $183,600. She asked for $115,800 from the regions. The regions approved the loan for the full amount.
Zsa Zsa’s total theft from American taxpayers then amounted to $182,500 from Regions + $427,187.47 from Trustmark, for a total of $609,687.47.
It’s time to go shopping!
After claiming she only had one business, Zsa Zsa deposited two of her PPP loans into the same bank account at Trustmark. Next, our criminal mastermind paid for an Audi Q3 by sending a wire transfer from the account that was solely funded via PPP loans to the Rusnak Westlake Audi dealership. She then wrote checks from the account to family members totaling $150,000.00. She also wrote an additional $49,200 in checks to her family members from one of her other PPP loan accounts at Trustmark.
The story in his Regions account was much the same. She wrote a cashier’s check for $26,997.00 and used it to pay cash for a Mercedes-Benz A-220 (VIN# WDD3G4EBCKW017692) that she registered to another family member.
It’s time to go to jail!
Several other interesting purchases were made with all this money, as the forfeiture requested by the court includes:
- a 2019 BMW 330
- a 2007 GMC pickup truck
- a 2019 Mercedes-Benz A220
- a 2017 Audi Q3 SUV
- a 2008 Ford Mustang GT
- and the entire contents of eight bank accounts, $2,400 seized during the search of her home and $1,180 seized from her purse.
Let’s review. . .
1. Banks were encouraged to help businesses survive fraud, we will find out in the end. Get the money out and save jobs.
2. But they WILL FIND YOU. If the number of employees you claim to have does not match IRS tax records or Alabama (or your state) Department of Labor numbers, YOU WILL BE CAUGHT.
3. When your bank realizes your PPP loan doesn’t match your payroll expenses, YOU WILL BE TAKEN.
4. If you certify (as required) that this is your ONLY PPP LOAN and then file multiple applications, YOU WILL BE CAUGHT.
5. If you open new bank accounts to avoid salary matching, the bank will eventually check this and YOU WILL BE CAUGHT.
6. And finally, if you take your PPP loan account and wire money to a car dealership, YOU WILL BE TAKEN.
Don’t be a Zsa Zsa. If you have committed fraud, return the funds and throw yourself at the mercy of the courts.