Accounting for small businesses

____________________

PPP Loan Fraud: A Growing Concern in Small Business Accounting

If you haven’t noticed, PPP loan fraud is becoming increasingly common, especially in the realm of small business accounting.

Google searches for PPP loan fraud are at an all-time high, according to Google Trends.

PPP loan fraud has become so rampant that it's even turned into a joke on Twitter.

It's puzzling why some people don't take the government's measures seriously or why they think they can get away with falsifying information about businesses and employees. There are numerous ways to easily invalidate their loans, such as:

Accounting for small businesses
Payroll taxes
Previously filed business returns

Moreover, every dollar taken under fraudulent circumstances is one less dollar for an actual struggling business trying to stay afloat, and it's frustrating to see this happening.

But here we are.

In this post, we’re going to break down exactly how this scam works by examining a few cases of people who have been caught so far.

And we say "so far" because we anticipate a surge in new arrests in the coming weeks.

Here are the stories of those who went not coo-coo for cocoa puffs, but for PPP.

PPP Loan Fraud Stories

1. The Pastor

When you think of someone with over 39 cars, a few people might come to mind—perhaps Mark Zuckerberg. But, in this case, you won't believe it: it’s actually a pastor.

Rudolph Brooks Jr., the pastor of Kingdom Tabernacle of Restoration Ministries in Washington, DC, was arrested and accused of using PPP money to buy over 39 cars, including a Tesla Model 3.

Despite his good taste in cars, here's where things took a turn for the worse.

According to the criminal complaint, Brooks identified himself as the owner of a business called Cars Direct, a used car business that he used to apply for a PPP loan. Authorities say that Mr. Brooks opened Cars Direct in 2010 but shut it down in 2012, just two years after starting it. However, Brooks allegedly revived the business in May 2020.