Man Sentenced to 2 Years for $2.3 Million Pandemic Relief Fraud

A Michigan man has been sentenced to two years in prison for a scheme to defraud the COVID-19 pandemic assistance programs of more than $2.3 million.

Jabari Long, 46, pleaded guilty to a charge of conspiring to commit wire fraud. The scheme involved Long using a contracting business to secure fraudulent loans from the COVID-era Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) initiatives.

In total, Long obtained $2,187,000 from PPP and $150,000 from EIDL, the Department of Justice (DOJ) said in a Sept. 28 statement.

However, the business had “few, if any, employees and little to no payroll expenses,” according to the DOJ. Long used a portion of the pandemic funds to buy a four-bedroom home in Beverly Hills, Michigan.

In his guilty plea, Long admitted to submitting false tax documentation in order to secure funding, the DOJ said. In addition to the prison sentence, Long will serve three years on supervised release. He has been ordered to pay $2,187,500 in restitution.

“Legitimate businesses that followed the rules and relied on pandemic-assistance programs in good faith deserve protection from those who seek to abuse those programs for personal enrichment,” Homeland Security Investigations Detroit acting special agent in charge Jeremy Pierczynski said in the statement.

“When fraudsters submit false information, invent payrolls, or misrepresent their operations to steal taxpayer-funded assistance, they undermine public trust and divert resources from the businesses and workers these programs were designed to support.”

Headed by Vice President JD Vance, the task force is a whole-of-government effort that aims to eliminate fraud, abuse, and waste in federal benefit programs.

Pandemic loan fraud has been under the scrutiny of various agencies in the Trump administration. Last week, the Small Business Administration (SBA) announced that around $100 billion in loans granted under various COVID-19 programs have been identified by tax authorities as suspected fraud.

One of the recent crackdowns against pandemic loan fraud was Operation No Doze, which began on June 12 and ended on Sept. 1.

During this period, the SBA Office of Inspector General, together with various attorneys and partners, engaged in enforcement actions against more than 160 people, involving $245 million in intended loss to the United States, according to a Sept. 14 statement from the DOJ. The enforcement involved allegations of exploiting the SBA’s COVID-era loan programs.

“The defendants charged during our summer surge allegedly fabricated businesses, submitted false payroll and revenue claims, stole identities, and concealed foreign ties on their applications—but they will now be prosecuted to the fullest extent of the law,” Attorney General Todd Blanche said in the statement.

Lawmakers have taken action to tackle COVID program fraud. In April, the SBA Fraud Enforcement Extension Act was passed by the Senate.

The Act seeks to extend the statute of limitations for prosecuting COVID-19 fraud so that such criminals can be held accountable and funds can be recovered, according to an April 29 statement from the office of Sen. Joni Ernst (R-Iowa).

On April 26, the statute of limitations began to expire, which would allow fraudsters who stole COVID funds and have not been held accountable to get away with their crimes, the statement said.

Ernst said in the statement that the Senate passage of the bill was a major win for taxpayers.

“Now the investigators have been given the time they need to track down the thieves who stole taxpayer dollars and to build strong, prosecutable cases,” Ernst said.

“Today’s action also sends a clear message to fraudsters: you will be held accountable. You will not get away with your crimes. This is critical to ensure that this blatant fraud is stopped in its tracks,” Ernst said.

The bill is now in the House of Representatives.