A South Florida woman will be heading to federal prison after being convicted of defrauding COVID-19 relief programs, including the Paycheck Protection Program (PPP). Malaina Chapman, a former employee of the Small Business Administration (SBA), illegitimately attained relief funds and spent them on personal luxury items, as reported by the U.S. Attorney's Office for the Southern District of Florida.
Last Friday, U.S. District Judge Rodolfo A. Ruiz II sentenced the 38-year-old Chapman to 54 months of imprisonment with a subsequent three years of supervised release. She also received orders to pay $1,297,178 in restitution. While working at the SBA from late September 2020 through mid-March 2021, Chapman exploited multiple schemes to siphon money from the PPP and Economic Injury Disaster Loan program, as well as additional local and state aid initiatives.
Chapman's fraudulent claims included the establishment of non-existent businesses, such as Upscale Credit Lounge, LLC and DA TRAP, LLC, for which she filed online loan applications with fabricated financial documents. The deceit led to loan approvals amounting to over $230,000 for Chapman herself. According to the same press release, her conspiracies with others resulted in charges against six additional defendants and a combined fraudulent claim of $837,716.
Chapman's lavish spending of the ill-gotten funds extended to designer brands like Louis Vuitton and Chanel, and even included purchasing a designer teacup puppy. Additionally, her misuse of the COVID-19 Emergency Rental Assistance Programs in Florida and Miami was among the fraudulent activities identified by investigators. Chapman also spent over $7,500 on a stay at a luxury resort in Key Largo. U.S. Attorney Hayden P. O’Byrne, whose team led the investigation, made the announcement alongside Special Agents from USPS-OIG, SBA-OIG, and DOL-OIG.
The case reflects ongoing efforts by the Department of Justice to combat pandemic-related fraud through the COVID-19 Fraud Enforcement Task Force and specialized Strike Force teams, including one headed by the Southern District of Florida’s U.S. Attorney’s Office. These groups focus on investigating, prosecuting the most culpable offenders and working to prevent further fraud within relief programs.
