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A nationwide business-aid fraud crackdown — highlighted by a bizarre Missouri scheme involving alleged stolen corporate identity — is among the enforcement actions being highlighted during the federal push dubbed “Fraud Week.”
The announcement is part of the Department of Justice’s National Fraud Enforcement Division’s nationwide summer surge. It netted more than 160 criminal defendants and approximately $245 million in intended losses to taxpayers, according to DOJ, as the agency announced busts from Los Angeles to Philadelphia.
“This is the problem of our day,” said U.S. Attorney Matt Price of the Western District of Missouri, whose office was one of 44 involved in the greater “Heartland Fraud Surge” that encompassed June through Sept. 1. “And this is a response to what happened over the previous four years,”
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Acting Attorney General Todd Blanche speaks during a news conference announcing what federal officials described as the largest healthcare fraud takedown in U.S. history, resulting in charges against 455 defendants nationwide. (Ken Cedeno / AFP via Getty Image)
“After 9/11, there was a huge lean-in, [an] all-of-government approach to national security issues,” Price said, comparing the Bush-era interagency pivot to terror threats with the coordinated response to the current push against fraud in taxpayer-funded programs.
Price headlined the extensive Small Business Administration (SBA) and COVID-19-related fraud probes under division chief Colin McDonald.
In the “Fur Lives Matter” case, a Missouri man allegedly claimed to operate 19 separate businesses, including some focused on pet care like “Fur Lives Matter,” “Fur Lives Matter LLC,” “Chows & Pals” and “God’s Chow Chow.”
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The Small Business Administration suspended more than 100,000 California borrowers amid nearly $9 billion in suspected pandemic-era loan fraud, SBA Administrator Kelly Loeffler announced Friday. (Bill Clark/CQ-Roll Call, Inc via Getty Images)
There was one glaring problem: “Fur Lives Matter” was a real company in another state — and prosecutors say it had no connection to Gray.
Using “Fur Lives Matter” and the other purported companies, Jamie Gray allegedly sought to fraudulently obtain nearly $56 million in Paycheck Protection (PPP) and Economic Injury Disaster (EIDL) funds from the Small Business Administration through 29 applications.
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Most cases involved entirely fictitious businesses, and only “Fur Lives Matter” was operational at the Feb. 15, 2020, eligibility cutoff.
“Gray effectively stole this company’s identity,” the DOJ said in a statement, alleging the legitimate business had no knowledge of him and that his claims about ownership, employees, revenue and operations were fabricated. Gray nevertheless received about $820,000 in SBA funds, prosecutors said.
The case stood out even among a summer surge of alleged fraud schemes for its unusual details.
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“If you screwed the American taxpayer, the federal government is now going to say you’re cut off, no more,” Vice President JD Vance said this week on the matter of the larger administration crackdown. “You shouldn’t be applying anymore, and if you do apply, you’re no longer able to get those benefits.”
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Price said the effort is expanding beyond Operation No Doze, the SBA-focused enforcement action conducted as part of the broader Heartland Fraud Surge.
His office and Missouri Gov. Mike Kehoe, along with other state officials, have also launched Operation Show-Me the Money, a new state-federal effort targeting fraud in state benefit programs.
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“No fraud is too small to prosecute, but leveraging all state resources in the state of Missouri from the top down [is believed to be] a first-of-its-kind collaboration between the state and the feds, working to identify and prosecute this type of fraud,” he said Saturday.
Price also credited SBA Administrator Kelly Loeffler with “leading from the front” as the agency is suspending suspected fraudulent borrowers and sending demand letters seeking repayment.
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He said the Heartland Surge depicts a new approach to countering fraud, characterizing the Biden administration’s attempts to recoup lost dollars as a “pay and chase” model.
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Attorney General Todd Blanche has instructed prosecutors to charge fraud cases of all sizes, in that the smaller cases sends the message to bigger scofflaws that, no matter the amount of money involved, “if you ripped off the American taxpayer… we will find you, we will identify you, we will hunt you down, we’ll prosecute you,” said Price.