By Adam Andrzejewski for RealClearPolicy
When the pandemic hit in 2020, Congress quickly passed the CARES Act, which included provisions for the Paycheck Protection Program, which was designed to rush money out the door to small businesses that need relief.
Sadly, many took advantage of the lax oversight the government gave to PPP loans. Valesky Barosy, for example, received $2.1 million in PPP loans, which he then allegedly used to buy “a Lamborghini Huracán EVO, Rolex and Hublot watches, and designer clothing from Louis Vuitton, Gucci, and Chanel,” according to a Department of Justice press release.
Barosy, a 27-year-old Florida resident, worked with several accomplices to allegedly falsify prior year expenses, net profit, payroll figures, and tax returns to apply for $4.2 million in PPP loans, of which they received $2.1 million.
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They have since been federally indicted on five counts of wire fraud, three counts of money laundering, and one count of aggravated identity theft, which could total up to 132 years in federal prison if convicted.
How was it so easy to get $2.1 million from the federal government?
Blame poor oversight from the Small Business Administration, which administered the funds. As we previously reported in this column, the SBA Inspector General found that potentially $3.6 billion of Covid relief money went to ineligible recipients. This was due to the SBA not cross referencing the US Treasury’s “Do Not Pay” Working System, as well as ignoring previous red flags associated with certain applications.
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Most of the blame certainly goes to the criminal that committed the crime. But the government has a responsibility to do everything in its power to make sure your tax dollars are being used for the right purposes and not for luxury cars and watches.
Syndicated with permission from Real Clear Wire.
The #WasteOfTheDay is presented by the forensic auditors at OpenTheBooks.com.
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