Dozens of businesses raked in at least $20 million in federal coronavirus relief loans despite appearing ineligible to receive them, a new report says.
More than 75 firms got Paycheck Protection Program loans worth at least $150,000 even though they didn’t exist before the spring or failed to meet other criteria for the program, the Miami Herald investigation found.
Businesses had to have been up and running on Feb. 15 of this year to qualify for the $659 billion program meant to help small companies stay afloat and keep workers employed during the coronavirus pandemic. But several recipients filed business registrations just days or weeks before winning their loans, according to the Wednesday report.
They included MK Analytics, Sanbi Solutions and KJ Traders and Consultants LLC, three businesses linked to a Texas man named Joseph Sinoj that were registered in Wyoming in May and then received PPP loans in June, the newspaper found.
Another firm tied to Sinoj, KMS Traders Group, also won a loan worth at least $2 million that month — but it didn’t file a registration until six days later, and its website wasn’t registered until Aug. 25, the story says.
An executive for KMS Traders reportedly claimed it had been operating since December 2018. “The Wyoming registration documents shows the entity classification adopted according to an update in operating agreement of the entity by the business and its date,” chief operating officer Mani Kandathil told the Herald.
Another PPP loan went to AnnJose University, a nonprofit school with links to Sinoj that claims to offer theology degrees, the paper reported. But its website appears to be copied from that of Domuni Universitas, an online theological school based in France, the Herald found.
Sinoj didn’t immediately respond to an email from The Post on Wednesday, and he didn’t answer the Herald’s questions about AnnJose. He did tell the paper he was a “controlling manager” for his five companies that received PPP loans rather than their beneficial owner.
The investigation unearthed the latest examples of potential misuse of a massive government aid program meant to blunt the economic damage from the COVID-19 pandemic. The feds have brought criminal charges against several recipients — including one Miami man who allegedly spent some of his nearly $4 million loan on a Lamborghini.
Working with the Anti-Corruption Data Collective, the Herald matched public PPP data with corporate registration information from a database called OpenCorporates to identify newly created businesses that got loans.
The paper noted that it likely undercounted the number of such businesses because the records database was missing information from 11 states and the feds haven’t released the names of PPP recipients that got less than $150,000.
The Small Business Administration, which oversaw the massive program, reportedly noted that it distributed $525 billion to small businesses in “an unprecedented amount of time.”
“Evidence of waste, fraud, and abuse with any of SBA’s loan programs is not tolerated and should be reported,” the agency told the Herald in a statement.