Rampant Farm Fraud Reportedly Plagues PPP Loans

“Beefy King” is not a real farm.

A real orange grove.
Photography by Sripfoto/Shutterstock

In its efforts to keep small businesses afloat during the pandemic, the government made a lot of money available. Probably, in retrospect, it was too available.

According to a new report from Derek Willis and Lydia DePillis at ProPublica, fraud in these programs sometimes involved fake and not even particularly well-faked farms. 

The CARES Act, which was signed into law on March 29, 2020, included a heaping amount of funds for the Paycheck Protection Program, or PPP, and those funds would later be nearly doubled in capacity. The PPP was designed to provide forgivable loans to small businesses affected by the COVID-19 pandemic—a bit of money to help with payroll and rent, to keep a business just barely above water until the worst of the pandemic was over. 

But the ProPublica investigation, along with the Department of Justice’s many lawsuits relating to PPP fraud, reveals that many instances of fraud were, theoretically, agricultural. Many farmers legitimately took advantage of PPP loans, although they did usually have to wait for the second round, owing to weird income tabulations in the first round. 

The loans found in the ProPublica investigation, though, are far from legitimate. One scam seems to have involved synthetic identity theft, in which some real information (such as names, addresses or Social Security numbers) are paired with fake profiles. These synthetic fraudsters would create seemingly random fake farms, and many are not the least bit plausible. A cattle ranch called “Beefy King” in the beach towns of the New Jersey coast? An orange grove in Minnesota? 

But that didn’t matter, thanks to automated approval services, which processed these PPP loans without a human ever looking at them. We don’t want to spoil more of the story, but head on over to ProPublica to read about Kabbage, one of these approval services, and how it enabled a fake potato farm in Florida to snag tens of thousands of dollars, among many other frauds.

Subscribe
Notify of

This site uses Akismet to reduce spam. Learn how your comment data is processed.

0 Comments
Inline Feedbacks
View all comments
Related
Farm Favorites
Read the latest reviews on our favorite products.
Immigrants Feed America

Immigrants Feed America t-shirts are back – find them at the Modern Farmers Market

Things We Love: AKUA Kelp Jerky

If you told me there was a jerky snack made out of kelp - yes,... (more)

Things We Love: CleverMade Snapbasket Cooler

It can keep up to 50 cans chilled for up to 36 hours and collapses... (more)

Things We Love: Republic of Tea Daily Greens Single Sips

It's like green juice: but way easier.

More shopping