TEXARKANA, Texas (KETK) – A man and woman from Cleveland, Texas were charged with filing hundreds of fraudulent applications under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, causing a $1.3 million loss to the U.S.
Clifton Pape and Sally Jung called their relief scheme My Buddy Loans, which garnered them more than $775,000 in fraud proceeds.
For a fee of $1082.50, My Buddy Loans took personal information from people and promised to file a federal application for a $10,000 agricultural grant. Instead, they filed for fraudulent Economic Injury Disaster Loan (EIDL) applications.
Pape and Jung completed more than 700 successful charges, then transferred the proceeds of the fraud scheme into their bank account.
They then used that money for several different purposes including to pay a traffic ticket and to fund a stay at a San Antonio resort.
Agents seized the $505,535.04 in fraud proceeds remaining in the account.
U.S. Attorney Stephen J. Cox of the Eastern District of Texas said that he encourages members of the public and the banking community to stay vigilant as another round of COVID relief begins.
“At a time when small businesses—the engines of our economy in East Texas—most needed the help that the Small Business Administration was rushing to provide, these individuals took advantage of members of the public, depleting the available resources for small businesses and lining their own pockets with fraudulent gain,” Cox said.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form.