An Illinois mental health worker claimed she was an author who raked in $115,000 from selling books in 2020 before her side business cratered during the COVID-19 pandemic.
A state correctional sergeant at Stateville prison claimed he ran a private security company on the side that brought in $100,000 in 2019 and also was hit hard by the pandemic the next year.
Now, both have been forced to resign, among 41 state employees listed in reports filed this year by the Illinois Office of Executive Inspector General claiming they defrauded the federal Paycheck Protection Program designed to bail out ailing businesses during the pandemic.
The reports say those 41 employees are suspected of ripping off the fraud-plagued PPP program of more than $900,000 in loans. Most of the loans in the program were forgivable, meaning they didn’t need to be repaid.
All the employees have resigned, many of them several years ago, but the reports weren’t made public until this year.
Almost all of them worked for the Illinois Department of Human Services, many in low-level positions. They claimed they owned businesses ranging from beauty salons to catering companies to ride-share operations.
But investigators determined they submitted fake applications and phony tax records to get PPP loans. Most admitted they turned to other people to fill out the applications for them in return for a cut of their loan proceeds. Those kickbacks averaged more than $2,200, the reports said.
One woman who got an $18,540 loan apparently filed bogus police reports claiming she was a victim of identity fraud in order to cover up her misdeeds.
A man who got a $20,833 loan wrote a letter to state authorities saying he intended to repay the money. He insisted his loan wasn’t fraudulent, but admitted he lied to investigators about the details of his PPP application because he feared he’d lose his 30-year job, which he did.
The Sun-Times isn’t naming the employees because they haven’t been charged with crimes. Their cases represent just a tiny fraction of the estimated $64 billion in fraud in the PPP program in 2020 and 2021.