Vance warns fraudsters not to ‘screw the American taxpayer’ as operation uncovers $245M in losses

KANSAS CITY, Mo. — The federal government is going after thousands of people suspected of stealing millions of dollars from taxpayers through their participation in a COVID-19 pandemic program meant to protect small businesses and workers, Vice President JD Vance said Monday.

The government is permanently suspending 870,000 people from receiving federal government loans after defrauding the Paycheck Protection Program and other federal programs, Vance said in a news conference at the FBI’s Kansas City, Missouri, field office.

“We’re going to make it impossible for them to get loans from the federal government,” Vance told a small gathering of law enforcement and local officials on the first leg of two stops, one in Missouri and another in Kansas.

The Paycheck Protection Program was set up to give loans to small businesses so they could rehire employees and keep their doors open during the pandemic. 

“As happens with so many of the programs that are born out of the generosity of the American taxpayer, we had many, many people who took advantage of those programs,” Vance said. 

“If you screw the American taxpayer, the federal government is now going to say you’re cut off, no more,” he added. 

William Kirk, inspector general for the Small Business Administration, said a national program will launch Tuesday with demand letters going to “suspected fraudsters in Kansas and Missouri.”

“It does not matter when the fraud happened. If you stole from the taxpayers by claiming … any SBA loan that you are not entitled to, answer the demand letter you’re going to receive from the SBA,” he said. “If you do not, you will face consequences. We know who you are and where you live.”

Vance criticized President Joe Biden’s administration for failing to initiate anti-fraud efforts with the Paycheck Protection Program loans, calling it an “open secret” that the program was rife with fraud.

PPP started issuing loans in 2020, under President Donald Trump. It quickly ran out of its first allocation of funding by April, after issuing more than 1.6 million loans, according to the U.S. Treasury.

More funds were allocated, and another round of loans were issued in 2021, under Biden.

Vance said that in the past three months, a fraud enforcement partnership made nearly 90 decisions to prosecute. 

“Decisions that are making clear and sending a message to the fraudsters that if you defraud the American people, if you steal money from the American taxpayer that should go to American workers, we’re actually going to prosecute you, and we’re going to try to send you to prison,” he said. 

U.S. Attorney General Todd Blanche said that from mid-June through Sept. 1, the administration uncovered $245 million in losses and charged more than 80 people in a summer focus called Operation No Doze. 

In a Missouri case, Jamie W. Gray attempted to steal more than $55 million by filing for hundreds of Paycheck Protection Program loans, claiming to own dozens of businesses in operation before the pandemic, Blanche said.

“But in every instance but one, these businesses didn’t even exist,” Blanche said. “The only business that he claimed to own that did exist was a business called Fur Lives Matter.”

That Texas business, though, hadn’t heard of Gray, Blanche said. Gray was indicted on money laundering and wire fraud charges, according to a Department of Justice news release.

“For years, fraudsters got the message that Washington would look the other way. That era is over. We’re charging more defendants,” Blanche said. “We’re convicting more. We’re taking the money back. We’re working with every single federal agency to use every tool in our toolbox to go after these fraudsters.”

Operation No Doze was a coordinated effort between SBA’s Office of Inspector General, federal prosecutors and more than 40 U.S. attorney offices, the DOJ news release said.  

The operation involved more than 160 criminal defendants and about $245 million in intended losses to American taxpayers, the news release said. 

U.S. Attorney for Kansas Ryan Kriegshauser announced Monday that four people in the state were charged with Paycheck Protection Program-related fraud with losses of about $182,000.

Vance said a review process was put in place for anyone who believes they have been “wrongfully tagged as a fraudster.”

The 870,000 people who can’t apply for loans from the federal government were “tagged as having a high likelihood of committing fraud for other actions that they’ve engaged in,” he said. 

“This actually sets up a system whereby, if you have a high suspicion of having defrauded the government, we’re not going to make it easy for you to apply for these loans anymore,” he said. “We certainly appreciate that some people, you know, mistakes sometimes happen. So we’ve set up a process to ensure that people can actually challenge whether they’ve been accurately tagged as a fraudster.”