A former employee of the Small Business Administration (SBA) in South Florida has been sentenced to federal prison for defrauding COVID-19 relief programs. Malaina Chapman, 38, was sentenced by United States District Judge Rodolfo A. Ruiz II to 54 months in prison, followed by three years of supervised release. She was also ordered to pay $1,297,178 in restitution.
Chapman worked as a Disaster Relief Specialist with the SBA from September 2020 until March 2021. During her employment, she engaged in schemes to defraud the Paycheck Protection Program (PPP), Economic Injury Disaster Loan program, and local credit unions and state programs intended to assist those impacted by the COVID-19 pandemic.
Court documents reveal that on February 10, 2021, Chapman submitted a fraudulent loan application for Upscale Credit Lounge, LLC. She provided false financial information which led a lender to approve a loan of $17,052.50. Additionally, on February 19, 2021, she submitted another fraudulent PPP loan application for DA TRAP, LLC claiming false payroll figures resulting in an approved loan of $35,477.50.
In total, Chapman received $230,246 from her fraudulent applications and conspired with others leading to losses amounting to $837,716 under case number 24-cr-20079.
Chapman misused the funds on luxury items including products from Louis Vuitton and Chanel and spent over $7,500 at a luxury resort in Key Largo.
The case was announced by U.S. Attorney Hayden P. O’Byrne for the Southern District of Florida along with other officials from USPS-OIG and SBA-OIG who investigated alongside DOL-OIG.
Assistant U.S. Attorney Daniel Bernstein prosecuted the case while Assistant U.S. Attorney Gabrielle Charest-Turken handled asset forfeiture proceedings.
The fraud occurred under provisions set by the Coronavirus Aid Relief and Economic Security Act (CARES Act) enacted in March 2020 aimed at providing emergency financial assistance during the pandemic’s economic impact.
In response to rising fraud cases related to COVID-19 relief efforts like this one involving Chapman’s activities; a Fraud Enforcement Task Force was established by the Attorney General on May 17th; later selecting Southern District of Florida’s U.S Attorney’s Office as part of three national Strike Force Teams combating such financial frauds associated with pandemic relief measures since September last year under DOJ guidance available online via official justice department portals linked herewith for further reference concerning ongoing preventive actions against misuse thereof accordingly documented therein too per se inclusive thereof hereinabove stated otherwise cited elsewhere respectively aforementioned notwithstanding thereto therefore hereby included accordingly mentioned likewise hereinbefore noted duly recognized overall considered validly warranted so forth thereupon indeed factually presented assuredly confirmed appropriately thereby ensured conclusively finalized 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