The Department of Justice is charging an Oakland woman with allegedly using $4.5 million in PPP coronavirus relief funds to fraudulently fund her luxurious lifestyle of travel and shopping at high-end stores.
The woman’s name is Christina Burden and she has been charged with one count of bank fraud that reportedly occurred in June when she applied for coronavirus business relief funds in the amount of $684,375 through the Paycheck Protection Program. She was approved for the loan that was allegedly for a shell company.
According to a criminal complaint, the DOJ says the woman allegedly went on to submit nine other fraudulent PPP loan requests. In the end, she was given over $4.5 million that reportedly went to four different companies that didn’t really exist.
“The Paycheck Protection Program provides a financial lifeline to needy businesses and their employees,” prosecutors stated. “We allege that Christina Burden obtained PPP funds by fraud, submitting false business information, false employee numbers, false bank statements, and false tax returns.”
The DOJ also stated:
“According the complaint, Burden’s loan applications contained multiple false statements certified as true. Among those, Burden falsely affirmed that each business was in operation before February 15, 2020, and her businesses had up to 89 employees and monthly payroll expenses of over $700,000. The complaint alleges, however, that the entities’ tax records reveal that none of them paid payroll taxes nor submitted any payroll tax forms. Bank records submitted in Burden’s applications as evidence of the four shell entities’ payroll expense payments were revealed to be doctored when compared against the actual bank records, per the complaint’s allegations.”
“The complaint lastly alleges that once Burden received the funds, she did not use the money to pay allowable PPP business expenses but instead spent it on personal indulgences: $184,000 on airfare, private jet travel, and hotel expenses; $124,000 on luxury purchases from Louis Vuitton and Neiman Marcus as well as purchases from Nordstrom, the San Francisco Giants Dugout Store, Sunglass Hut, Tumi, and Wayfair; $16,000 on boat and car rentals; and $14,000 on various restaurant and entertainment expenses, among other purchases. In addition, the complaint alleges Burden wired hundreds of thousands of dollars to friends and family, $150,000 of which was spent in part on Mercedes and Land Rover vehicles.”
All of this is alleged so far but it seems as though the Justice Department has the evidence it needs in bank and tax records to prosecute Burden.
If convicted, Burden could get up to 30 years in prison and a $1 million dollar fine. She was arrested Friday morning in Austin, Texas, and will appear in court on February 8.
“As we begin a second round of PPP loans for small businesses who are struggling during this pandemic, we will be on alert for fraudsters who seek to take advantage of the program,” FBI San Francisco Special Agent in Charge Craig Fair proclaimed.
“Those who wish to defraud programs designed to help those in need should know that the FBI and our partners will pursue every investigative tool available to us to ensure the integrity of those programs and that they remain available to our community’s small business owners,” Fair went on to emphasize.
The PPP forgivable loan program came into being through the March CARES Act. The SBA has approved over 400,000 in loans worth approximately $35 billion.