An online lending platform that processed hundreds of thousands of Paycheck Protection Program loans during the first round of coronavirus relief last year gave away millions to non-existent farms supposedly along the Jersey shore.
An investigation from ProPublica found that the lending platform, Kabbage, gave 378 small loans to fake business entities for a total of $7 million. Each of the fake businesses were “structured as single-person operations and received close to the largest loan for which such micro-businesses were eligible,” the outlet reported. Further, some of the fake businesses had ridiculous names:
As the first round of the federal government’s relief program for small businesses wound down last summer, “Ritter Wheat Club” and “Deely Nuts,” ostensibly a wheat farm and a tree nut farm, each got $20,833, the maximum amount available for sole proprietorships. “Tomato Cramber,” up the coast in Brielle, got $12,739, while “Seaweed Bleiman” in Manahawkin got $19,957.
As ProPublica reported, none of those businesses appear in New Jersey’s business records. Even stranger, people who live at the addresses listed for the companies didn’t appear to be aware of any loans. One of the businesses, a fake cattle ranch called “Beefy King,” was registered to the home address of Long Beach Township Mayor Joe Mancini, who seemed surprised about the registration when he spoke to ProPublica.
“There’s no farming here: We’re a sandbar, for Christ’s sake,” Mancini told the outlet over the phone. He also said he had no cows, only three dogs.
New Jersey beaches aren’t the only odd locations for alleged farms that received loans from Kabbage. ProPublica also found loans going to fake potato fields in Palm Beach, Florida, and fake orange groves in Minnesota.
“The Kabbage pattern is only one slice of a sprawling fraud problem that has suffused the Paycheck Protection Program from its creation in March 2020 as an attempt to keep small businesses on life support while they were forced to shut down. With speed as its strongest imperative, the effort run by the federal Small Business Administration initially lacked even the most basic safeguards to prevent opportunists from submitting fabricated documentation, government watchdogs have said,” ProPublica reported. “ While that may have allowed millions of businesses to keep their doors open, it has also required a massive cleanup operation on the backend. The SBA’s inspector general estimated in January that the agency approved loans for 55,000 potentially ineligible businesses and that 43,000 obtained more money than their reported payrolls would justify. The Department of Justice, relying on special agents from across the government to investigate, has brought charges against hundreds of individuals accused of gaming pandemic response programs.”
As The Daily Wire previously reported, some of the people who fraudulently obtained PPP loans used the money to buy luxury items, like cars and homes. A D.C. pastor used coronavirus relief funds to buy 39 cars, including a Tesla, and a house. As The Daily Wire reported in September, others used funds to purchase Rolex watches, Rolls Royces, and other luxury items. The Daily Wire also reported in late December on numerous other frauds and scams related to PPP loans.