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Fake farms in SWFL received thousands of dollars in PPP loans

Among the many tens of millions of companies that obtained PPP loans through the COVID-19 pandemic have been small farms in Southwest Florida.

The issue? Among the farms don’t truly exist, the NBC2 Investigators have discovered.

A wheat farm in Lehigh Acres obtained a mortgage of greater than $20,000, however there’s no farm on the listed deal with. It’s a one-story residence out within the nation.

Melon farmers in San Carlos Park additionally obtained a taxpayer-funded mortgage. However there’s no fruit on the location, solely a home guarded by a small canine in a dense neighborhood.

A PPP mortgage additionally went to an apple orchard — sure, you learn that proper — in Southwest Cape Coral. No shock, there aren’t apple timber on the deal with. It’s only a residence in a pleasant, gated neighborhood.

“It’s weird,” FGCU finance professor Tom Smythe stated of our findings. “You don’t develop apples on the Southwest Florida coast.”

The weird development was initially found by ProPublica, a nonprofit newsroom that discovered a whole bunch of pretend farms had obtained pandemic loans throughout the US.

The NBC2 Investigators needed to search out out if it was taking place in Southwest Florida, so we scoured publicly accessible PPP mortgage information from the U.S. Small Business Administration.

Ultimately, we recognized an inventory of 5 farms with suspicious traits: every was a sole proprietorship, every used the identical originating lender, every obtained an identical mortgage quantities — or near it — and every mortgage was accepted within the precise identical week.

Most significantly, we couldn’t discover Florida enterprise information for any of the 5 farms.

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After we finally visited every of the addresses listed in mortgage information, our suspicions have been confirmed: the farms don’t truly exist.

“I believe criminals are, whether or not we prefer it or not, actually good folks,” Smythe informed NBC2.

However, who are the criminals defrauding the mortgage program?

The NBC2 Investigators found every of the pretend farms is called after an actual particular person dwelling on the listed deal with.

Nonetheless, as soon as we lastly received in contact with these folks, they have been all stunned and stated that they had no concept concerning the loans.

The robust suspicion is that scammers are behind the fraud.

“These folks which are doing this? Are in all probability the those who did the scams on — choose your subject — 2 or 3 years in the past,” Smythe defined.

ProPublica instructed the pretend farms have been created by fraudsters utilizing stolen identities and addresses of actual folks throughout the US.

When the NBC2 Investigators contacted these dwelling on the addresses of the non-existent farms in Southwest Florida, not solely have been they stunned, however a number of confirmed they have been certainly current victims of id theft.

“It’s only a new spin on an outdated crime,” Lauren Kocinski, an IRS particular agent primarily based in Fort Myers, stated in an interview with NBC2. “With any new authorities program, there’s at all times criminals trying to money in on this system.”

The NBC2 Investigators introduced our findings to Kocinski, who stated she can not touch upon particular circumstances or doable future circumstances. She did say the IRS is working with the SBA every day to research crime inside the mortgage applications.

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“We’re conscious of this fraud. We’re conscious of stolen identities getting used to perpetuate this fraud,” Kocinski defined. “Fairly frankly, it’s not stunning.”

“These criminals have been opportunistic in saying, ‘Hey — there’s a possible goldmine right here,’” Smythe stated.

The mortgage applications have been susceptible to fraud, particularly at first of the pandemic, Smythe defined. He stated the federal government was accepting some danger by getting cash out rapidly to struggling small companies.

However ProPublica additionally positioned some blame on Kabbage, the corporate that originated the loans for the pretend farms. It’s not a conventional financial institution, however a web based lender that’s now accused of not having the right checks in place whereas processing the loans.

“The Fintech lending course of is constructed completely off of know-how,” Smythe stated of on-line lending platforms. “Until the know-how is strong sufficient to select up on issues like a enterprise in southwest Florida that’s an apple orchard, it’s gonna fly underneath the radar.”

A U.S. House subcommittee is now investigating Kabbage and different Fintech lenders.

“I’m deeply troubled by current experiences alleging that monetary know-how (FinTech) lenders and their financial institution companions did not adequately display screen PPP mortgage purposes for fraud,” a md of the committee wrote. “This failure could have led to tens of millions of {dollars} in FinTech-facilitated PPP loans being made to fraudulent, non-existent, or in any other case ineligible companies.”

The NBC2 Investigators reached out to Kabbage, however a spokesperson stated the PPP loans are actually being dealt with by a separate firm referred to as Ok Servicing. American Categorical reportedly acquired Kabbage final 12 months however not its current mortgage portfolio, which included PPP loans.

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The NBC2 Investigators additionally reached out to Ok Servicing, however haven’t but heard again.

Usually, a mortgage is both paid again or a enterprise proprietor applies to have it forgiven.

It’s not identified what is going to occur with the loans that went to the pretend farms, as a result of it’s unclear the place the cash truly went.

Not one of the folks whose identities seem to have been stolen to acquire the funds have gotten notices that they should repay the loans, not less than not but.

Among the people are actually investigating to attempt to rectify the scenario. Every requested that their names not be launched, expressing concern about id theft.

The NBC2 Investigators additionally reached out to the Small Enterprise Administration, however haven’t but heard again. The company has arrange a webpage the place folks can report PPP identity theft.

“You will have criminals and scammers which are stealing instantly from the funds that you’re paying in,” Kocinski stated. “So it ought to make us all upset.”



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