COVID Feature: A Fraud Pandemic

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Hacking and criminal concept.A hacker in a secret hiding place is neon light.

The coronavirus pandemic has severely impacted the ability of small businesses to retain employees and families to make ends meet. The federal government enacted several programs to financially assist Americans through the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Unfortunately, the increase in government aid has contributed to a rise in fraudsters trying to exploit these government assistance programs. (No surprise there.)

A formerly convicted bank robber fraudulently obtained $600,000 in Paycheck Protection Program (PPP) loans for several businesses in Fall River, Mass. Michael Moller, also known as Michael Robinson, of Middletown, Mass. is accused of falsifying records to apply for loans designated to help coronavirus relief efforts. (It seems fitting that a two-faced fraudster would have two names.)

Moller filed for $4.7 million in forgivable federal loans through the PPP programs, claiming that he needed to make payroll for his employees. (How confident of this fraudster to casually request millions of dollars as if they’re entitled to it.)

PPP loans are government loans disbursed through the Small Business administration (SBA). The loans are meant to be distributed to small businesses financially impacted by the coronavirus pandemic. These loans are only forgivable if they are used for business expenses such as payroll, or to cover mortgages.

Investigators later learned that the businesses Moller listed were fictional, as they were never incorporated with the Massachusetts Secretary of State and did not possess any tax or bank records. Moller also applied for additional loans using his father’s name, his girlfriend’s brother’s name, and his girlfriend’s son’s name. (He decided to rope the whole family into his scheme.)

After fraudulently receiving $600,000 in PPP loans, Moller filed eight additional falsified loan applications using the name of his girlfriend’s son. (Fraudsters are never satisfied. They always want more.) Moller alleged on the eight applications that he needed to make payroll for another fictitious business based in Fall River. The applications were filed with different financial institutions to avoid suspicion. 

Each of the eight applications in his girlfriend’s son’s name were nearly identical asking for $734,3000 in PPP loans through the SBA. None of the 11 applications filed using his father’s name, his girlfriend’s brother’s name, or his girlfriend’s son’s name resulted in Moller receiving additional loans. Rather, the abundance of similar applications is what led to an investigation. (He was too lazy to change the dollar amounts.)

Moller used the fraud for personal expenses and to manufacture a lavish lifestyle. (Again, no surprise there.) He used part of the loan money to indulge in a $30,000 trip to Las Vegas before being caught by authorities.

While Moller is currently facing charges for making false statements and bank fraud, the threat of prison time is nothing new to him. Moller was convicted in Massachusetts in 2010 for fraud and was sentenced to 24 months of supervised release. (Once a fraudster, always a fraudster.)

During his 24 months of supervised release, Moller was charged and convicted on four counts of bank robbery. He was sentenced to 108 months of prison and three years of supervised release. He was carrying out his term of supervised release, which was set to last until July 2022, when he allegedly conducted this PPP loan fraud.

If found guilty of bank fraud, the maximum penalty is 30 years in federal prison. Moller could also be forced to pay a $250,000 fine as well as restitution. (Sounds like a pretty good cure for a fraud pandemic.)

If you think you are a victim of fraud involving COVID-19, you can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or submit the NCDF Web Complaint Form. 

Today’s Fraud of the Day comes from an article, “Convicted bank robber fraudulently obtained $600,000 in PPP loans,” published by MassLive on September 23, 2020.

A man convicted of robbing banks in Massachusetts obtained $600,000 in forgivable federal business loans and spent $30,000 in Las Vegas before being caught, federal prosecutors said Tuesday.

Michael Moller, 41, of Middletown, was held without bail pending trial at an appearance Tuesday in federal court.

 

 

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.