Watchdog accuses Cook County employees of federal loan fraud
According to a new county inspector general’s report, four Cook County employees committed “financial fraud directed against the federal government” by wrongfully collecting approximately $120,000 in Payroll Protection Plan loans intended for help businesses survive the pandemic.
The allegations stem from the first of several ongoing investigations “involving duplication and PPP loan applications taken by employees of all Cook County government offices,” said Patrick Blanchard, chief of the Inspector’s Office. independent general, in an email to the Tribune. .
Blanchard’s office recommended that all four employees be placed on the county’s “do not rehire” list and has been “in contact with federal and state officials regarding this line of OIIG investigations,” Blanchard said.
Employees are not named in the report. But he noted that three worked in offices under Cook County Council Chairman Toni Preckwinkle who handled sensitive financial matters, while a fourth worked at the County Board of Review.
The federal Paycheck Protection Program was plagued by fraud, with some experts estimating $80 billion in loans were stolen nationwide as the government rushed to secure financial aid for struggling businesses in the the height of the pandemic.
In March, a Justice Department crackdown led to the indictment of just 120 defendants of PPP fraud.
The county’s IG investigation looked at whether county employees who applied for PPP loans complied with county rules on outside employment or any other personnel rules.
They discovered that a Department of Revenue employee had received two PPP loans totaling nearly $39,000 saying she was “self-employed,” according to the report. This employee later admitted “that she falsely claimed to own a business that did not exist in order to obtain funds through a federal PPP loan” and “to have spent these funds inappropriately on personal expenses”, indicates The report.
The worker violated county staff rules regarding “unbecoming conduct” by employees, according to the report. She also violated the county’s technology use policy, admitting that she used the county’s printer and computers to “continue her PPP loan fraud activities,” according to the report.
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Two employees of the county comptroller’s office, which handles payroll and other financial matters, were named in the report.
One of the employees got a $20,832 PPP loan pretending to be the sole proprietor of an unnamed business. This employee admitted to misrepresenting information about her business and operations in her PPP application, including inflating her gross receipts “so she could qualify for a larger PPP loan,” the report said.
“Any numbers she floated about her business….were arbitrary numbers that did not represent any actual business she conducted in 2020,” according to the report.
The employee admitted to using the money “for personal family vacations … on several occasions,” the report said. She had also failed to notify the county that she had a second job, according to the report.
The second Comptroller’s Office employee, a payroll officer, ‘signed two loan applications falsely stating that she owned a business’ which paid her a salary of $107,000 in order to secure $41,510 in loans PPP. The supervisor “has experience in tax and financial matters” and knew it would be wrong for her to spend the loan money, according to the report.
The review board employee admitted to making “misrepresentations” on a request for $18,750 in PPP loan funds, and “false information” in a second request when the first was denied. After being accepted, she spent the money “on a trip,” according to the report.
In an email, Preckwinkle spokesperson Nick Shields said: ‘We don’t normally discuss personnel matters. We have just received the report and are reviewing it accordingly. We will then assess how to move forward.
William O’Shields, a spokesman for the review board, said the employee in question “voluntarily” resigned in June without mentioning the investigation. The office will follow up with county human resources officials to place that employee on the “do not hire” list, he said.
Blanchard said the county has 45 days to act on the recommendations and has “been advised that disciplinary proceedings are ongoing.”