Former Missouri Rep. Cori Bush’s husband, Cortney Merritts, has been charged with defrauding the government by accepting fraudulent payments from the Small Business Administration (SBA) COVID aid program known as the Payment Protection Program (PPP).
Federal prosecutors say that Merritts falsified details about his SBA loans in 2020 and 2021. According to the SBA, the PPP was a “loan program designed to help businesses, including nonprofits, veterans organizations, and tribal business concerns, maintain payroll and other essential costs during the COVID-19 crisis.” The program offered potentially forgivable loans, with forgiveness tied to maintaining payroll and other eligible expenses.
It’s estimated that at least half of the $793 billion in PPP loans were fraudulent. Some of those loans went to billionaires and large corporations. It was the most obscenely mismanaged invitation to corruption in American history.
Prosecutors allege that Merritts, a former security officer and U.S. Army veteran, fraudulently obtained loans totaling $20,000.
“Mr. Merritts intends to plead not guilty to the charges,” Merritts’s lawyer, Justin Gelfand, said in a statement. “As with any indictment, this is only the government’s version of the story. We look forward to litigating this case in federal court in Washington, D.C.”
Merritts was already under a cloud of suspicion after Bush used campaign funds to hire him as a bodyguard when she was in Congress. The House Ethics Committee cleared Bush of all charges.
U.S. Attorney Edward Martin Jr., along with key federal agents, said Merritts manipulated SBA provisions designed to aid struggling businesses. On July 7, 2020, Merritts allegedly claimed an $8,500 EIDL loan for Vetted Couriers, a business that allegedly had six employees and $32,000 in annual gross revenue. A day later, Merritts applied for another EIDL [Economic Injury Disaster Loan,] this time as a sole proprietor, inflating his employee count to 10 and reporting $53,000 in revenue. The SBA denied additional funds upon finding his applications nearly identical.
The fraudulent schemes escalated when, on April 22, 2021, Merritts secured a $20,832 PPP loan by allegedly and falsely declaring a new business with a gross income of $128,000. He later filed for loan forgiveness, claiming he used the funds for payroll expenses, despite the funds being used for personal purposes. The SBA eventually forgave the PPP loan, including interest, based on his deceptive assertions.
I’m grateful that the Justice Department is going after fraudsters but this is like closing the barn door after the barn was abandoned a hundred years ago. The last administration gave out almost 12 million PPP loans. Even after the SBA discovered there was fraud, they still reimbursed the crooks for the full amount of the loan. Only a tiny fraction of fully recoverable fraudulent loans were eventually recovered.
According to NPR, “auditors have manually reviewed only about 215,000, or roughly 2% of the total, according to Patrick Kelley, associate administrator for the SBA’s Office of Capital Access.” The rest of the loan applications were filtered through a computer model.
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I applaud going after Merritts and his $20,000 heist. But what about some of these other criminals who received ten times or even a hundred times more and just walked away with it?
At least half a trillion dollars out of the $5 trillion in COVID aid that Congress appropriated ended up in the hands of international criminal gangs, domestic grifters, organized crime outfits, and hundreds of thousands of ordinary people like Merritts who saw an opportunity to turn easy virtue into easy cash.
The people responsible knew there would be massive fraud in these COVID-19 aid programs and did nothing to stop it.
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