July 18, 2020

Woman accused of $2 million loan fraud

Woman accused of $2 million loan fraud


LITTLE ROCK — A woman was arrested Thursday on charges that she fraudulently obtained nearly $2 million in Paycheck Protection Program loans meant for small businesses affected by covid-19.

U.S. Attorney Cody Hiland and Special Agent in Charge Diane Upchurch of the FBI’s Little Rock office said the woman used some of the money to pay her student loan and go on a $6,000 online shopping spree.

Ganell Tubbs, 41, who claimed to operate businesses called The Little Piglet Soap Company and Suga Girl Customs, was charged with two counts each of bank fraud and making a false statement on a loan application, and one count of engaging in a monetary transaction with proceeds of unlawful activity. She was indicted by a federal grand jury a week ago, but the indictment remained sealed until her arrest Thursday.

“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,” Upchurch said in a news release. She added, “Alongside our federal and state partners, we will remain vigilant against fraudsters and ensure that PPP funds are used as intended.”

According to the announcement, Tubbs submitted an application through the program on April 30, representing Suga Girl Customs had paid $1,385,903 in wages and compensation during the first quarter of 2020. She was approved for a loan of $1,518,887, and received the money May 5.

Two days later, according to the indictment, she used the proceeds to make an $8,000 payment on her student loan, and the following week, spent about $6,000 while shopping online at retailers including Apple, Michael Kors, Sephora, Northface and Nike.

On May 5, Tubbs submitted another false loan application in the name of Little Piglet Soap Company, through which she received a loan for $414,375.

“These loans are meant to help small-business owners who have suffered economically due to covid-19 shutdowns,” Hiland said.

The guaranteed forgivable loans were made available to small businesses as part of the Coronavirus Aid, Relief and Economic Security Act, also known as the CARES Act, which was enacted on March 27 to provide emergency financial assistance to millions of Americans suffering from the financial effects of the covid-19 pandemic.

Initially, Congress authorized up to $349 billion in Small Business Administration loans through the program. In April, Congress authorized additional funding of more than $300 billion.

To obtain such a loan, a small business must submit an application signed by an authorized representative of the business, acknowledge program rules and make certain certifications, such as the amount of its monthly payroll expenses and its number of employees. The business must also provide documentation of payroll expenses.

The loan proceeds must be spent on payroll costs or on interest on mortgages, rent or utilities.

The indictment says neither of the businesses Tubbs listed is in good standing at the secretary of state’s office and both list her address on Herndon Road as their address.

Tubbs appeared Thursday before U.S. Magistrate Judge Tom Ray, who released her on bond.

The investigation leading to her arrest was done by the FBI, the Small Business Administration Office of Inspector General and the U.S. Treasury Inspector General for Tax Administration. The case is being prosecuted by Assistant U.S. Attorneys Pat Harris and Jamie Dempsey.

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