According to a recent report, the Illinois Office of Executive Inspector General has made referrals of 177 state workers to law enforcement agencies.
These referrals allege that these employees have unlawfully received Paycheck Protection Program loans, amounting to at least $4.5 million.
The governorship and both legislative houses of Illinois are held by members of the Democratic Party.
The Paycheck Protection Program (PPP) administered by the Small Business Administration (SBA) has been regarded as one of the most notorious instances of fraudulence within the realm of federal programs. It has been estimated that approximately $200 billion worth of loans disbursed under this program were fraudulent in nature.
The Illinois Inspector General initiated an inquiry into state personnel with the objective of ascertaining whether any individuals had engaged in fraudulent activities pertaining to the federal government’s Paycheck Protection Program (PPP). A total of 438 investigations were commenced by the organization in relation to employees who received PPP loans over $20,000. Among the 204 investigations that have been closed, almost 87% of them, namely 177 cases, were subsequently forwarded to law enforcement.
The aforementioned referrals were based on the “reasonable cause to believe that a State employee violated the State of Illinois Code of Personal Conduct and/or agency policy by obtaining PPP loans based on falsified information.” According to Illinois legislation, the Inspector General (IG) is mandated to report instances of misappropriation over $5,000 in public monies to the Illinois Attorney General.
Fontrell Antonio Baines, the 33-year-old rapper known as ‘Nuke Bizzle’, was sentenced to six years in prison after admitting to stealing $1.2M of COVID relief funds. He boasted of the scheme, which prosecutors say relied on Cash App, in a music video weeks before his arrest
According to the Inspector General (IG), the estimated aggregate value of these deceitful loans amounts to $4.5 million. However, it should be noted that the continuing investigation by the IG has yet to conclude, with 234 investigations still awaiting resolution.
The Department of Human Services in Illinois has been implicated in the majority of fraud cases, as 132 out of the total 177 referrals involve employees from this particular organization. The subsequent highest agency, namely the Department of Children and Family Services, received a total of 25 referrals.
FILE PHOTO: U.S. President Joe Biden leaves after speaking about the coronavirus disease (COVID-19) response and the vaccination program from the Rose Garden of the White House in Washington, U.S., May 13, 2021. REUTERS/Kevin Lamarque
In June, the Associated Press released a study on pandemic relief fund fraud.
“An Associated Press analysis found that fraudsters potentially stole more than $280 billion in COVID-19 relief funding; another $123 billion was wasted or misspent. Combined, the loss represents 10% of the $4.2 trillion the U.S. government has so far disbursed in COVID relief aid.”
That number is certain to grow as investigators dig deeper into thousands of potential schemes.
How could so much be stolen? Investigators and outside experts say the government, in seeking to quickly spend trillions in relief aid, conducted too little oversight during the pandemic’s early stages and instituted too few restrictions on applicants. In short, they say, the grift was just way too easy.
According to a “newsletter from the Office of Executive Inspector General for the Agencies of the Illinois Governor:”
In 2022, the Office of Executive Inspector General for the Agencies of the Illinois Governor (OEIG) initiated a large-scale fraud investigation project, to examine whether State of Illinois employees improperly obtained federal Paycheck Protection Program (PPP) loans.
PPP loans were issued to provide relief to small businesses affected by the COVID-19 pandemic, and were eligible for forgiveness if used for qualifying expenses.
Using publicly available information, the OEIG identified PPP loans obtained by individuals with personal identifiers matching those of employees under the OEIG’s jurisdiction.
Because a preliminary review of the data revealed a large number of such loans, the OEIG initially focused the investigation on PPP loans of approximately $20,000 or more.
In order to be eligible for a PPP loan of that size, a business typically would have needed to generate approximately $100,000 or more of annual net profit or gross income—earned outside of the employee’s full-time State work hours.
Once the OEIG identified these PPP loans, the OEIG conducted further investigation to determine whether employees received those loans in a fraudulent manner.
The State of Illinois Code of Personal Conduct requires State employees to conduct themselves “with integrity and in a manner that reflects favorably upon the State.”
In addition, various agency policies prohibit employees from engaging in conduct that is unbecoming of a State employee.
In 177 cases to date, the OEIG determined that there was reasonable cause to believe that a State employee violated the State of Illinois Code of Personal Conduct and/or agency policy by obtaining PPP loans based on falsified information.
The OEIG has, so far, issued these founded reports to the employing State agencies, as indicated below:
To date, the improper loans identified in these founded reports total more than $4.5 million in public funds.
The OEIG’s PPP investigation project remains ongoing. These numbers do not reflect a final total of OEIG founded reports or a final total for any particular agency. State employees are expected to maintain the public’s trust and confidence, and misappropriating public funds is far from acting with integrity, or conducting oneself in a manner that reflects favorably upon the State. Acting in such a manner may result in the loss of employment.
Employees also are reminded of their duty to cooperate with OEIG investigations, and that failure to cooperate can also be grounds for disciplinary action, including dismissal.
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