How Millions of Dollars in PPP Loans Went to Phony Farms
It’s no secret that when government unleashes a wave of cash and low- or no-cost loans on the countryside, criminals and grifters will swarm to it.
That’s exactly what happened with the Paycheck Protection Program, which was intended to help keep workers on payrolls during the government-mandated shutdowns. ProPublica looked at farm-sector loans, and found big government checks making their way to phony farms with neither employees, nor a single crop to harvest:
The shoreline communities of Ocean County, New Jersey, are a summertime getaway for throngs of urbanites, lined with vacation homes and ice cream parlors. Not exactly pastoral — which is odd, considering dozens of Paycheck Protection Program loans to supposed farms that flowed into the beach towns last year.
As the first round of the federal government’s relief program for small businesses wound down last summer, “Ritter Wheat Club” and “Deely Nuts,” ostensibly a wheat farm and a tree nut farm, each got $20,833, the maximum amount available for sole proprietorships. “Tomato Cramber,” up the coast in Brielle, got $12,739, while “Seaweed Bleiman” in Manahawkin got $19,957.
None of these entities exist in New Jersey’s business records, and the owners of the homes at which they are purportedly located expressed surprise when contacted by ProPublica. One entity categorized as a cattle ranch, “Beefy King,” was registered in PPP records to the home address of Joe Mancini, the mayor of Long Beach Township.
“There’s no farming here: We’re a sandbar, for Christ’s sake,” said Mancini, reached by telephone. Mancini said that he had no cows at his home, just three dogs.
The investigative piece is worth reading in its entirety to understand the incentives that drove lenders to cut corners, or simply ignore them entirely, and how widespread the fraud became.
Bottom line: PPP may have been a boon to a number of legitimate businesses. But it was also a honeypot for greed, crime, and incompetence.