ST. LOUIS (KMOV) — Luxury cars, spending sprees and cash; everything has come easily to scammers during the pandemic.
Now the government is cracking down on people who stole billions of tax dollars meant to help those financially impacted by Covid. But some wonder if the government was also partly to blame.
One company that received almost $400,000 in funding is a janitorial company called Star Shyne. His listed address is for a place called “Wing Strip” in Florissant, which is not open for business.
This was part of the Payroll Protection Program or PPP.
Launched at the start of the pandemic, companies could apply for forgivable loans, government funds to keep employees on staff instead of furloughing them or letting them go.
“I believe in the value of the PPP program, but it was always going to be a problem, it was,” says Gwendolyn Carroll. She is a federal career fraud attorney in St. Louis.
“When you release many billions of dollars into the economy with almost no restrictions, people benefit and that’s where my office comes in,” she says.
The government estimates that about $100 billion went to people who didn’t deserve it.
“These are all taxpayer dollars, that money being defrauded. It is money that I pay, my neighbor pays, all members of society who do the right thing and obey the law, they are exploited,” Carroll said.
Locally, she says there are more than 45 investigations into PPPs or other government fraud related to Covid-19.
She declined to talk about most of them: “Because we have secrecy obligations during ongoing investigations, we can’t talk about a lot of things.”
But she can talk about some people, like Robert Williams, because she’s worked to send them to jail before.
“Williams is serving a sentence that he has richly earned,” Carroll said.
Williams, a felon once convicted of identity theft, suddenly became a millionaire during the COVID-19 pandemic after raising $1.5 million in fraudulent PPP funds.
He even recruited others to make easy money. But he left the government easy, buying a Jaguar sports car and even a Maserati with the money.
The government seized cars and other property. When Williams gets out of prison in 10 years, he will still be working to pay off his debt to society.
Many more are still awaiting their day in court, such as Christopher Lee Carroll and George Reed.
Carroll and Reed, heads of Square One Group, a Des Peres-based timeshare dating company, are accused of a scheme to take nearly $3 million in PPP funds.
Instead of using it to pay employees, they furloughed workers anyway, according to the indictment, and used the money to buy dozens of trucks and trailers for a brand new company. Both men have pleaded not guilty.
But the indictment also notes that Carroll was a registered sex offender on parole at the time of the PPP fund application. Carroll’s attorney argues that this is irrelevant because subsequent revisions to PPP law have removed requirements regarding crime and/or status.
News 4 searches have located dozens of people charged with PPP fraud across the country.
Recently, the actor who played the Red Power ranger on a popular children’s show was charged.
Locally, News 4 found an accused man who said he ran a restaurant and food business with employees in Wentzville, but the address listed was actually a UPS store.
Federal fraud prosecutor Gwen Carroll, however, says some people got creative, even forging documents like W-2s.
“People love money for nothing and this was another way to get money for nothing,” she says.
She tells News 4 that it’s often family members or neighbors who turn people into FBIs.
“If someone shows up with a new car or has an in-ground pool installed in their home, it’s worth calling and letting law enforcement know what you saw,” Gwen Carroll said.
But defense lawyer Joel Schwartz said that without due diligence and a suspension of normal loan underwriting, it was just too easy for people to take money.
“It would be like putting a child, an infant, with a bunch of popsicles and ice cream and saying ‘don’t touch it.’ It was as simple as that,” he says.
Williams was one of his clients. He expressed remorse, Schwartz says, and knew he would likely get caught. The taxpayer, however, will likely never see most of the money again, Schwartz says.
“I hope the government has learned that there needs to be some oversight,” he says.
News 4 went to the address given for Star Shyne in Florissant last year, expecting to find the concierge business. The large amount of the loan, the lender the owners used, and the papered windows of a chicken restaurant all raised questions.
Michael Smith, an associate of the firm, said the owners did not want to be filmed. Still, he says their PPP money has been put to good use.
“It helped us stay open and realize what we were doing. We do construction here and it’s been a blessing,” Smith says.
Do you want to contact the authorities about a company that seems a little suspicious? Click on here.
In the meantime, there are several fraud cases charged in our area – and News 4 will continue to track them.
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