The Government Accountability Office (GAO) warned in June there was a "significant risk" of fraud for Paycheck Protection Program loans.
GAO said, which oversees spending for the CARES Act, "a number of loans approved, the speed with which they were processed, and the limited safeguards, there is a significant risk that some fraudulent or inflated applications were approved."
The GAO said the Small Business Administration (SBA) had safeguards to deter fraudulent loans, but as we find out in mid-July, they weren't good enough.
Fortune reports a Texas man received almost $1 million in PPP loans to support 51 employees at his "Texas Barbecue" company to payout salaries during months of lockdowns.
The only problem, Joshua Argires, who received $956,250, never had a BBQ company nor any employees, but received the money and deposited in Coinbase to trade cryptocurrency.
On Tuesday, Argires was charged with wire fraud, bank fraud, and engaging in the unlawful monetary transactions by the Department of Justice (DoJ).
The DoJ didn't specify how they detected the fraud but suggest something was a miss when Argires noted on PPP forms he would pay 51 of his fictitious employees $90,000 per month.
"Such a high average salary for a barbecue operation raises further suspicion," the DoJ's complaint said.
Argires was involved in another PPP scam, that was with a fictitious business called Houston Landscaping. The DoJ said he was paid out $160,657 in PPP funds.
There was no mention of what cryptocurrencies the Texas man bought or how frequently he was trading.
During the PPP disbursements period, we outlined how some Americans who received Trump stimulus checks were taking the money and using it for "securities trades."
The rise of daytraders, as Goldman strategists have recently pointed could explain the surge in small trades over the last several months. It seems like President Trump's CARES Act partially funded the boom in day trading during the pandemic. With Nasdaq at new highs, well, mission accomplished Mr. President.