Texas woman charged for $1.9 mln covid-relief fraud

September 15, 2020

By a Biometrica staffer

A Texan woman has been taken into custody on allegations of defrauding the Paycheck Protection Program (PPP) of more than $1.9 million in forgivable loans, the US Department of Justice said in a statement.

The Small Business Administration (SBA) guarantees PPP loans under the Coronavirus Aid, Relief and Economic Security (CARES) Act.

Lola Shalewa Barbara Kasali, 22, has been charged with making false statements to a financial institution, wire fraud, bank fraud and engaging in unlawful monetary transactions. The criminal complaint alleges Kasali submitted at least two fraudulent PPP loan applications.

One application was submitted on behalf of an entity called Lola’s Level and the other in the name of Charm Hair Extensions. Kasali allegedly received the amount after the Lola’s Level application was approved. After receiving the funds, she transferred the money into four additional bank accounts, the complaint further alleges. Authorities were able to seize the funds later, according to the charges.

The loan applications allegedly asserted both Charm Hair Extensions and Lola’s Level had numerous employees and significant payroll expenses. However, neither entity has employees nor pays wages consistent with the amounts claimed, according to the complaint.

PPP & the CARES Act

Established by the CARES Act, the PPP provides small businesses with necessary funds to remain operational despite the severe economic hit from the covid-19 pandemic.

The CARES Act is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects of the covid-19 pandemic, and was enacted as federal law on March 29. One source of relief is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April, Congress authorized over $300 billion in additional PPP funding.

Through PPP, qualifying small businesses and other organizations are eligible to receive loans with a maturity of two years and an interest rate of 1%. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period, and use at least a certain percentage of the loan towards payroll expenses.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form.