P3 loan for fake Minnesota orange grove raises questions – Twin Cities

ROCHESTER, Minnesota – Mantorville, Minnesota is known for many things: its history as a stagecoach stop, its haunted opera house, and the famous Hubbell House restaurant.

However, the Dodge County community of 1,197 people is not known as a place to grow oranges.

This is why a Paycheck Protection Program, or PPP, ready to support an “Orange Grove” in the heart of small town Minnesota has become a prime example of unidentified groups or entities using fake farms to. collect hundreds of small loans.

A $ 17,000 PPP loan was distributed to “Shaila Big Fresh Oranges” on Clark Street in Mantorville in August 2020. Another loan of $ 20,000 was also approved for Shaila Wanous for a “sole proprietorship” orange grove earlier. in April 2020, but these funds were never released. .

All this surprised the young woman whose name appears on the loans. Shaila Sagers – Sagers is the name she takes from her stepfather and the name she usually uses, and Wanous is her legal name – was surprised when reporters called her about the loans last week.

“I don’t know what a PPP loan is,” she said as the story was explained to her. She was unaware that her name and the address of a home she once owned had been used to dip into federal money intended to help struggling small businesses following the pandemic. The program was created under President Donald Trump.

She’s not the only one to discover that her name was used on an apparently fraudulent loan.

ProPublica, a national nonprofit news organization, investigated loans processed by Kabbage, an online lending platform working with the Small Business Administration that processed nearly 300,000 PPP loans before the debt ran out. first series of funds in August 2020. ProPublica published an article, “Hundreds of PPP loans have gone to bogus farms in absurd places,” May 8.

Journalists found that 378 loans totaling $ 7 million were made to one-man farms, mostly classified as farms. However, the “businesses” that received the loans were not incorporated in the states where they were supposed to be based.

In addition, many “farms” were as absurd as the “orange grove” of Mantorville. There was a potato field in Palm Beach, Florida, and a cattle farm on a sandbar in New Jersey.

The Mantorville “orange grove” is the only such loan identified in Minnesota.

“I was just that lucky Minnesotan… Do I feel special?” Sagers said with a laugh in an interview on Monday, May 24. While she could find an ounce of humor in the ordeal, Sagers said knowing that her information was being used in a potentially fraudulent scheme was very frightening. She is looking for ways to report this, including contacting Kabbage and filing a police report.

Minnesota companies received 217,096 loans, according to SBA data compiled by ProPublica. Of these, 91% were loans of $ 150,000 or less. A total of 314 loans have been distributed to businesses in Dodge County for a total of $ 20 million to $ 39 million in loans, according to a PPP database.

Many of the other names on the suspicious loans were people who previously had issues with identity theft, according to ProPublica reporter Derek Willis. Sagers said she was not aware of any cases of theft or misuse of her personal data.

Why Sagers, and why an orange grove in Minnesota, are just two of the many mysteries surrounding these suspicious Kabbage loans. Where did the money for the PPP loan supposed to support American companies go?

Kabbage, which was acquired by American Express last fall, had no explanation for ProPublica’s findings.

“At any point in the loan process, if fraudulent activity was suspected or confirmed, it was reported to FinCEN, the SBA Inspector General’s office and other federal investigators, with Kabbage providing full cooperation,” spokesman Paul Bernardini said in an email. statement to ProPublica.

The SBA Inspector General released a report on the issue of fraudulent PPP loans on May 6. As of January 31, the SBA had referred 846,611 loans “related to an identity theft complaint (people who say they have not applied for a loan and believe they are a victim of identity theft) and all related requests ( requests with the same email address, phone number or physical address). “

These suspicious requests amounted to $ 6.2 billion in loans and $ 468 million in grants.

The IG report also said that individuals, like Sagers, claiming that their identities were used for PPP loan applications “have been waiting for a long time, some of them months, for a resolution on potentially fraudulent loans at their name that could affect their ability. to get credit. “

Sagers is concerned about how her name linked to a fraudulent loan could affect her credit rating. No one seems to know the answer to this question.


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