Pawn Shop Owner Settles PPP Loan Fraud Case - Small Business Trends

The owner of a pawn shop in New Jersey has settled allegations relating to the Paycheck Protection Program (PPP) loan.


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Pawn Shop Owner Settles PPP Loan Fraud Case

Daniel Markus, the owner of the pawn shop, has agreed to pay $50,000 in civil penalties to settle allegations that stipulated the company, in obtaining more than one PPP loan in 2020, breached the False Claims Act and the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA).
The story reiterates the importance of honesty and transparency when applying for PPP loans, and any type of business grant or loan. Making false and fraudulent claims for loans like PPPs, which proved invaluable in helping small businesses with cash flow and other expenses during the COVID-19 pandemic, can be significantly damaging to a business and its reputation.

Providing Critical Small Business Relief

Describing the importance of these types of loans, Principal Deputy Assistant Attorney General Brian Boynton, head of the Justice Department’s Civil Division, said: “PPP loans were intended to provide critical relief to small businesses.
“The department is committed to pursuing those who knowingly violated the requirements of the PPP or other COVID-19 assistance programs and obtained relief funds to which they were not entitled,” Boynton added.
PPP loans were launched in March 2020, as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act. CARES was created to provide emergency financial support to Americans suffering economically due to the COVID-19 health crisis.



Billions of dollars in forgivable loans was authorized through CARES to small businesses which were facing difficulties in paying employees and other business expenses.

Businesses Only Able to Apply for One PPP Loan

It was made clear throughout 2020 that businesses applying for PPP were not able to receive more than one loan prior to December 31, 2020.
In the case of Daniel Markus and his pawn business, the settlement resolved allegations that Markus knowingly and improperly received and retained a second, duplicate PPP loan in 2020.
The COVID-19 Fraud Enforcement Task Force was established by the Attorney General on May 17, 2021. It was created to marshal resources of the Department of Justice in partnership with agencies across government to heighten efforts to combat and prevent fraud related to the COVID-19 pandemic.


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The resolved lawsuit involving Daniel Markus demonstrates that the Department of Justice will identify businesses that took advantage of the relief package program.

Important of Honesty to Create Small Business Success

The case highlights the importance of maintaining honesty in every aspect of running a small business. While defrauding a loan program established by Congress to offer small businesses a lifeline during challenging times may be an extreme move carried out by a small number of businesses, the lawsuit underlines the value of honesty in building and maintaining a sound business reputation.

Honesty sets the tone for a business culture that people want to work in, as well as building loyalty and trust among customers and prospects.
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Image: Depositphotos


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