Malaina Chapman, a former employee of the Small Business Administration (SBA), has been formally charged by authorities with wire fraud and bank fraud after allegedly abusing her position to file false applications for several COVID-19 relief programs. In her initial appearance in Miami federal court, Chapman faced allegations of defrauding the Paycheck Protection Program (PPP), the Economic Injury Disaster Loan (EIDL) program, and both state and local rental assistance initiatives intended to help those reeling from the pandemic downturn.
The U.S. Attorney's Office delineates a portrait of an SBA Disaster Relief Specialist who seemingly sought to turn the nation's time of need into an opportunity for personal enrichment. In a detailed breakdown of Chapman's schemes, it was revealed that she not only fabricated business entities to unjustly gain financial aid but also involved herself in conspiracies to craft and submit fraudulent loan applications. This insight came according to the criminal complaint, which detailed Chapman's actions during her employment from September 28, 2020, through March 18, 2021.
"Disaster relief was intended for people in need, namely functioning businesses, corporate forms, and sole proprietorships facing uphill prospects during the pandemic, not for those who sought to pad their pockets and defraud the government by making up entities or overstating their payroll and revenues to qualify for the relief," stated U.S. Attorney Markenzy Lapointe for the Southern District of Florida, as reported by the U.S. Attorney's Office. The same statement further emphasized the ongoing commitment to hold accountable those who exploited and defrauded financial institutions and the government's pandemic response.
Chapmasters' fraudulent activities included the submission of a falsified loan application for "Upscale Credit Lounge," where a Schedule C form reported inflated gross revenues and profit, leading to an unwarranted approval of a $17,052.50 loan. Another application for "DA TRAP" claimed unsubstantiated employee numbers and payroll, resulting in a $35,477.50 loan approval. Alongside solo acts, Chapman was also implicated in a wider conspiracy involving six defendants, among them Raisha Kelly, the alleged ringleader, as per the criminal complaint.
Beyond the business loans, Chapman also exploited COVID-19 relief measures by filing for assistance under rental aid programs, even going as far as submitting documents purportedly signed by an individual who had passed away over a year prior. The State of Florida authorized payment based on these misrepresentations, funneling $15,000 into bank accounts under Chapman's control.
Ensuring that justice is served regarding pandemic relief fraud remains a top law enforcement priority, as evidenced by the establishment of the COVID-19 Fraud Enforcement Task Force and a dedicated Strike Force led by the Southern District of Florida's U.S. Attorney’s Office. Investigations for Chapman's case were conducted by the SBA OIG among other agencies, with Assistant U.S. Attorney Daniel Bernstein assigned to prosecution duties. It's essential to remember that the charges are mere accusations and Chapman, like all defendants, holds the presumption of innocence until proven guilty in a court of law.
As the public grapples with revelations of such fraud, authorities encourage anyone with information about potential COVID-19 financial fraud to report it to the Department of Justice’s National Center for Disaster Fraud. More detailed information about the investigations and the prosecution can be sourced from the website of the District Court for the Southern District of Florida or the public case records under case number 24-mj-03358.
