Arkansas woman admits $2m Covid relief fund fraud

‘We will not tolerate fraudsters who lie to obtain these funds and then use them for their personal enjoyment,’ says US Attorney Cody Hiland

A woman from Little Rock, Arkansas pleaded guilty to bank fraud charges after illegally obtaining almost $2m in relief funds designated for struggling small businesses during the coronavirus pandemic.

Cody Hiland, United States Attorney for the Eastern District of Arkansas, and Diane Upchurch, Special Agent in Charge of the FBI Little Rock Field Office, announced the guilty plea of Ganell Tubbs on Thursday.

Ms Tubbs fraudulently obtained loans under the Paycheck Protection Program, part of the US effort to support the economy during the economic slowdown caused by Covid-19.

The guilty plea comes as Republicans and Democrats in Congress continue to battle over the details of a second round of relief for an economy ravaged by the impact of the virus.

At the hearing, Ms Tubbs admitted that she purported to own two businesses: The Little Piglet Soap Company, and Suga Girl Customs.

According to the Arkansas Secretary of State, neither business is in good standing, and both businesses list Ms Tubbs’ residence and personal phone number as their contact information.

On 30 April, Ms Tubbs submitted a PPP application representing that Suga Girl Customs had paid $1,385,903 in wages and compensation during the first quarter of 2020. She was approved for a PPP loan of $1,518,887 and received the funds on 5 May.

Two days later, she used the proceeds to make an $8,000 payment on her personal student loan.

The following week, Ms Tubbs went on an online shopping spree, spending approximately $6,000 in purchases at retailers including Apple, Michael Kors, Sephora, North Face, Nike, and others.

Having received the initial funds on 5 May, Ms Tubbs submitted another PPP application, this time regarding The Little Piglet Soap Company. Based on the false representations she made in the loan application, the company received a PPP loan for $414,375.

“This defendant took almost two million dollars that were intended to keep small businesses afloat during Covid-related shutdowns,” says US Attorney Hiland. “Hardworking Arkansans needed these funds to pay their employees and support their families, and we will not tolerate fraudsters who lie to obtain these funds and then use them for their personal enjoyment. We ask anyone with information on suspected PPP fraud to please report it.”

The indictment, which was returned by a grand jury on 7 July, charges Ms Tubbs with two counts of bank fraud, two counts of making a false statement on a loan application, and one count of engaging in a monetary transaction with proceeds of unlawful activity.

Speaking at the time of the indictment, Special Agent Upchurch said: “Numerous businesses across Arkansas are struggling to remain open during this Covid-19 pandemic, so our office has zero tolerance for anyone who fraudulently misuses federal funds intended to help companies weather this tough time.”

Ms Tubbs pleaded guilty on Thursday to one count of bank fraud in exchange for dismissal of the remaining charges.

Her plea was accepted this afternoon by United States District Judge Brian Miller, who will sentence Ms Tubbs at a later date.

The FBI, the Small Business Administration – Office of Inspector General, and the US Treasury Inspector General for Tax Administration conducted the investigation.

Assistant United States Attorneys Pat Harris and Jamie Dempsey are prosecuting the case.

There have been 179,000 confirmed cases of Covid-19 in Arkansas, and 2,820 officially recorded deaths.