A Texas woman who received nearly $ 2 million in paycheck protection program loans amid the ongoing coronavirus pandemic was arrested by federal authorities on Tuesday on fraud allegations.
Lola Shalewa Barbara Kasali, of Houston, has been charged with making false statements to a financial institution, bank wire fraud, bank fraud and participating in illegal money transactions, according to a statement from the US Department of Justice.
Officials say Kasali, 22, allegedly submitted two fraudulent PPP loan applications for two companies – Lola’s Level and Charm hair extensions – and said he had multiple employees and significant payroll costs.
“According to the charges, however, no entity has employees or pays salaries in line with the amounts claimed in loan applications,” the statement said.
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After receiving more than $ 1.9 million in loans, Kasali transferred the funds to four additional bank accounts, officials said. Kasali is scheduled to appear before US Magistrate Judge Christina Bryan in Houston on Wednesday.
This is not the first incident of someone accused of fraudulently receiving PPP loans. In July, a Florida man was accused of receiving $ 3.9 million in loans to buy a Lamborghini sports car, among other things.
A report released earlier this month found that PPP loans, originally designed for small businesses, had been misallocated among businesses that had already received a loan or had been excluded from the program. Among other things, the report shows that around 10,000 loans have been made to companies that have received more than one PPP loan.
“The Treasury needs to improve oversight and accountability to ensure taxpayer dollars are not wasted,” said James Clyburn, DS.C., chair of the Special Subcommittee on the Coronavirus Crisis.
“Taxpayers shouldn’t have to choose between getting help quickly to those in need and wasting federal funds, and there are simple steps that could have been taken to improve oversight and reduce fraud,” he said during a hearing when the report was released.
The paycheck protection program expired on August 8, with no clear plan to extend it. The program was part of the CARES (Coronavirus Aid, Relief and Economic Security) law passed by Congress in March, which provided assistance to more than 5 million businesses.
Contributor: Ledyard King and Nicholas Wu, USA TODAY