. This indictment is the latest set of charges resulting from the COVID-19 Relief Fraud Strike Force issued by the U.S. Attorney’s Office earlier this year.
On March 27, 2020, the President signed into law the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. The CARES Act provided a number of programs through which eligible small businesses could apply for and obtain relief funding intended to mitigate the economic impacts of the pandemic for small businesses and local businesses. One such program, the Paycheck Protection Program (PPP), provided small businesses with government-backed loans that could be forgiven as long as the proceeds were used for payroll and other qualifying expenses. Another program, the Economic Injury Disaster Loan (EIDL) program, provided low-interest loans that could be deferred until the end of the pandemic to provide “bridge” financing to small businesses to maintain their activities during shutdowns and other economic circumstances caused by the pandemic. . The PPP and EIDL programs have provided billions of dollars in aid, the vast majority of which has not been repaid, including hundreds of millions of dollars disbursed in eastern Washington.
“COVID-19 relief programs were designed to support our community during the crisis, and due to the number of people and businesses applying for funding, some deserving small businesses were unable to obtain funding to maintain their activities in operation,” the U.S. attorney said. Waldref. “We created the COVID-19 Fraud Strike Force because fighting pandemic-related fraud and holding accountable those who abused these programs is critical to the strength and safety of our community in eastern Washington. The Strike Force works to ensure that limited resources are used to protect our local small businesses and the essential jobs and services they provide to the community.
In February 2022, U.S. Attorney Waldref and the U.S. Attorney’s Office (USAO) began working with federal law enforcement agencies to create and launch a COVID-19 Fraud Strike Force that would leverage partnerships between different agencies to aggressively investigate and prosecute fraud against COVID-19. relief programs in eastern Washington. The strike force is made up of representatives from USAO agencies, the Office of Inspector General (OIG) of the Small Business Administration (SBA), the Federal Bureau of Investigation (FBI), the Inspector General of US Treasury Department for Tax Administration (TIGTA), US Secret Service, US Homeland Security Investigations, US Department of Veterans Affairs OIG, General Services Administration OIG, Internal Revenue Service, Department of Energy OIG, and others. Cases investigated and prosecuted by the Strike Force have resulted in numerous indictments, criminal prosecutions, and civil penalties.
The indictment announced today charges seven counts of fraud stemming from an EIDL and two PPP loans obtained by Padilla in 2020 and 2021 on behalf of his supposed collector car business identified as Queen B Collectibles. The indictment alleges that Queen B Collectibles was not a legitimate business, had no employees, receipts or business operations, and was not eligible for EIDL or PPP funding, and that Padilla submitted false information in order to fraudulently obtain over $59,000 in EIDL and PPP. funding. The indictment also alleges that Padilla unsuccessfully and fraudulently attempted to obtain four additional EIDLs for Queen B Collectibles, which the SBA did not fund.
“I commend the stellar investigative work on these cases done by Strike Force and in particular in this case by SBA OIG and TIGTA,” U.S. Attorney Waldref said. “We will continue to work with our law enforcement partners to vigorously prosecute those who misuse and abuse COVID-19 relief funds, and to strengthen our communities by protecting our small businesses and local businesses.”
This matter was investigated by the Eastern District of Washington’s COVID-19 Fraud Task Force, with SBA OIG and TIGTA as lead investigative agencies. This case is being prosecuted by Assistant United States Attorney Tyler HL Tornabene, Assistant United States Attorney Dan Fruchter and Special Assistant United States Attorney Frieda K. Zimmerman.
An indictment is only an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt by a court.