Fed bans six bankers for COVID-19 loan fraud

By on April 5, 2022 0

The Federal Reserve on Tuesday (April 5) banned six former bank workers, including two who had previously worked in the wealth management unit of Bank of America Corp., for approving fraudulent loans for small businesses that needed help. a financial boost during the COVID-19 pandemic.

Autumn Jordan and Manuel F. Pinazo, who previously worked at Merrill Lynch Wealth Management, and Dedryck O. Carson, Wendy Rodriguez Legon, Michael T. Lemley and Tracy L. Mallory, who worked at Regions Financial Corp., requested assistance in under one of the government’s pandemic relief programs “based on false and fraudulent representations and used the funds for unauthorized personal expenses,” the Fed said in issuing its lifetime bans from working in the industry , according to a Bloomberg report.

The bankers got loans through the Small Business Administration’s COVID-19 Economic Disaster Loan Program. They did not admit or deny their involvement in the scheme as part of their punishment.

A representative for Bank of America declined to comment, and a spokesperson for Regions did not immediately respond to Bloomberg’s request for comment. Jordan said in a message that the alleged actions by the Fed were carried out “fraudulently in my name”. The other five people charged in the scheme either did not respond or could not be reached for comment.

Related: California man convicted of PPP fraud and money laundering scheme

In March, the US Department of Justice said a California man had been convicted by a federal jury of submitting fraudulent claims for Paycheck Protection Program (PPP) funds and money laundering. .

The Paycheck Protection Program is a CARES Act program designed to provide small businesses with the funds to pay for up to eight weeks of payroll costs and benefits. Fraudulent PPP loan submissions are not uncommon, and The New York Times reported in October that more than 15% of the program’s loans, totaling $76 billion, had at least some indication of potential fraud.

Robert Benlevi, 53, of Encino, Calif., submitted 27 PPP loan applications totaling $27 million to four different banks between April and June 2020 on behalf of eight companies he owned.

Benlevi’s businesses were shown to have no employees or payroll charges, while his fraudulent PPP claims falsely claimed that each of the businesses had 100 employees and $400,000 in average monthly payroll charges.



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