Coronavirus crisis: South Bay man received millions in PPP loans for fraudulent businesses ‘created’ after pandemic began
To remedy this, the Small Business Administration is granting billions of dollars in loans to help businesses pay their employees, but the SBA tells the ABC7 I-Team that it is investigating many reports of possible fraud.
The SBA needed to withdraw that money quickly to help companies stay afloat, and they admit their oversight could have been tighter. Tonight we ask – did a man from South Bay get millions of dollars he didn’t deserve?
It’s only been four months since President Trump signed the CARES Act.
“I wanted it to be a nice signing,” Trump said.
This set up the Paycheck Protection Program, and 5 million small businesses have already received over half a trillion dollars ($ 518 billion) in low-interest loans that can be canceled. .
Miryam Barajas, of SBS Region 9, told the I-Team: “The PPP program is supposed to be able to keep employees on the payroll, while businesses are affected by COVID-19. “
Dan Noyes: “So these are our taxes.”
Miryam Barajas: “These are our taxes. P3s are our taxes.”
The Small Business Administration tells us that so much money was spent so quickly that it resulted in possible fraud.
Some ABC7 viewers checked the list of companies that received PPP loans and reached out to I-Team reporter Dan Noyes to ask him about a candidate from South Bay who used “88” in his name. his company:
- 88 Cloud Computing
- 88 Business services
- 88 Investment Empire
- 88 Venture capital
The owner claimed to have 48 employees and received between $ 350,000 and $ 1 million for each of these businesses.
We passed the company names through the secretary of state’s office and they all go to Lebnitz Tran, 39; we found his photo on Linkedin.
Dan Noyes from the I-Team contacted him by phone, and Tran told us his business was real. When asked for an on-camera interview, he said he should check with his secretary.
He insisted he had 48 employees, but when we asked to see his operation, he hung up.
Team I ran the address that Tran listed as the headquarters of these companies, and it turns out to be her mother’s home in Campbell.
Dan Noyes stopped there several times and never found anyone home, he repeatedly texted and called Tran.
The I-Team also visited the house it owns in San Jose and found people lounging on a couch in his open garage.
Dan Noyes: “Does he own this house?”
Nobody in the garage: “Yes.”
Dan Noyes: “Is he here?”
No one in the garage: “No.”
And we walked up the driveway to Tran’s house in Saratoga, and talked with a man there, but we didn’t find Tran.
Man: “Who are you?”
Dan Noyes: “I work at Channel 7. I’m Dan Noyes.”
Man: “And why do you need him?
Dan Noyes: “I’m making a story on him.”
We never heard from Lebnitz Tran.
The Small Business Administration also has questions for him. Records showed that he had formed these four companies within the past two months, well after the start of the pandemic, and that this would violate PPP guidelines.
Miryam Barajas said: “The PPP program was aimed at companies that were already in business before COVID-19.”
Barajas explains that the SBA guarantees loans, but it’s up to banks and lending institutions to process applications and review a company’s finances. Three of the online lenders Lebnitz Tran used – Fundbox, Harvest, and Lendistry – did not return our phone calls and emails for comment.
“Obviously, the SBA is taking this very seriously,” said Miryam Barajas. “And any type of report of fraud or abuse will be investigated and will not be tolerated.”
The FBI has formed a task force on PPP fraud with the Small Business Administration; they have opened nearly 100 investigations with more than $ 42 million in potential fraud identified, to date.
The SBA tells us that Lebnitz Tran was already on their radar before we called. We will follow the evolution of the situation.
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