Dozens of Broward Sheriff’s deputies face indictment in burgeoning PPP loan fraud case

By Dan Christensen, FloridaBulldog.org

Update Oct. 12 – Broward Sheriff’s employees, including sworn deputies and civilians, began turning themselves in this morning to face impending federal fraud charges involving the theft of hundreds of thousands, perhaps millions of dollars in loans from the COVID-19 Paycheck Protection Program. Dozens of BSO employees are expected to be indicted later today. Federal prosecutors have scheduled a press conference for this afternoon.

The unprecedented surrender of what insiders expect to be 50 to 70 BSO employees prompted the sheriff to close BSO headquarters building at 2601 W. Broward Boulevard. Parking spaces were roped off; orange traffic cones were set up at the building’s entrance.

Oct. 11 – Dozens of Broward Sheriff’s Office employees alleged to have fraudulently obtained large loans under the federal COVID-19 Paycheck Protection Program (PPP) are facing an impending indictment that knowledgeable sources said could come any day.

Those involved are said to be mostly from the ranks of BSO deputies and detention deputies, and include ranking officers. Sheriff Gregory Tony is not a target, one source said.

“Anywhere from 50 to 70 guys is the rumor spreading around over here,” said one BSO deputy who, like others interviewed for this story, spoke on condition of anonymity. “Fifteen or 20 are law enforcement and the rest are jailers and, you know, civilians.”

No names were immediately available, but many at BSO who stand accused before a federal grand jury already have been suspended, sources said.

Rank-and-file deputies that Florida Bulldog spoke with are “disgusted” by the alleged criminal behavior of their colleagues. “For a while after [the] Parkland [school shooting] they called us the ‘cowards of Broward.’ Now, we’re the thieves of Broward,” said one deputy. “Guys literally had to take their badges off to go and eat lunch because of our reputation during Parkland…We’re supposed to be better than this.”

U.S. FRAUD STRIKE FORCE

The ongoing federal investigation is spearheaded by the South Florida U.S. Attorney’s Office’s pandemic relief fraud strike force, which has charged numerous business persons and professionals with PPP fraud. But PPP fraud committed by state and local law-enforcement officers who have private businesses on the side has become a principal focus of the strike force.

This year alone task force prosecutors have obtained guilty pleas involving hundreds of thousands of dollars in misappropriated funds from a former Miami-Dade Corrections sergeant, a former Miami-Dade police officer, a former Miami police officer and a former correctional officer with the Florida Department of Corrections.

Another such defendant, Immigration and Customs Enforcement contract detention officer Anthony Faustin, 28, of Homestead, pleaded guilty Sept. 19 to wire fraud and aggravated identity theft as part of a scheme in which he submitted fraudulent PPP loan applications on behalf of six individuals in 2021. In the loan paperwork, Faustin made the applicants appear eligible for pandemic relief by misrepresenting them as sole proprietors or lying about their prior years’ income or both. Lenders disbursed over $100,000 to bank accounts controlled by the individuals, who then withdrew the money and gave Faustin his cut, the government said.

Faustin faces up to 20 years in prison and a fine of $250,000 at sentencing before Miami U.S. District Judge Rodolfo Ruiz on Dec. 7.

The impending mass indictment does not appear to capture all of the PPP cases now being assembled against BSO deputies. A Broward attorney interviewed Tuesday by Florida Bulldog said he represents one BSO detention deputy that is accused in another PPP scheme, but that his client’s case is “independent” of the mass indictment.

PPP ACT FRAUD

The PPP was a $950 billion low-interest business loan program established as part of the Coronavirus Aid, Relief and Economic Security Act (CARES Act) signed into law by President Trump to help various businesses and the self-employed to continue to pay their workers during the worst months of the pandemic. The loans could be partially or fully forgiven if businesses accepting the loans kept their employee count and wages stable. The program, administered by the Small Business Administration (SBA), ended May 31, 2021.

Fraudsters, however, took advantage of the program. In June, the SBA reported that over the course of the pandemic it disbursed a total of $1.2 trillion in both PPP and COVID-19 Economic Injury Disaster Loans (EIDL). EIDL loans were intended to provide small businesses with both working capital and operating funds.

“In the rush to swiftly disburse COVID-19 EIDL and PPP funds, SBA calibrated its internal controls. The agency weakened or removed the controls necessary to prevent fraudsters from easily gaining access to these programs and provide assurance that only eligible entities received funds. However, the allure of ‘easy money’ in this pay and chase environment attracted an overwhelming number of fraudsters to the programs,” the SBA reported.

“We estimate that SBA disbursed over $200 billion in potentially fraudulent COVID-19 EIDLs, EIDL Targeted Advances, Supplemental Targeted Advances, and PPP loans. This means at least 17 percent of all COVID-19 EIDL and PPP funds were disbursed to potentially fraudulent actors.”

The report says that SBA’s Office of Inspector General, the U.S Secret Service and other federal agencies and financial institutions have so far recovered nearly $30 billion of those misspent funds.