Pandemic fraud crackdown yields first case against bank employees
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(Reuters) -- U.S. prosecutors have brought what is believed to be the first case against bank employees who allegedly exploited multi-billion-dollar programs aimed at helping small businesses survive the COVID-19 pandemic.
In a case unsealed in Brooklyn federal court on Friday, prosecutors say Anuli Okeke, a former branch manager at Popular Bank in New York, conspired with other bank employees and tax preparers to apply fraudulently for more than $3 million in pandemic relief loans overseen by the U.S. Small Business Administration.
Alex Moncion, a spokesperson for Popular Bank, which was not named in the complaint, said on Monday that the bank had alerted law enforcement and bank regulators to the conduct and terminated the employees involved.
“This behavior is contrary to our commitment to integrity and to our values and business practices, which are guided by the highest ethical principles,” said Ms. Moncion.
The loan programs, which provided forgivable and low-interest loans to small businesses, were part of Congress’ multi-trillion-dollar response to the pandemic.
The relief effort has been plagued by “unprecedented levels of fraud,” the U.S. Special Inspector General for Pandemic Recovery said in June.
More than 500 individuals have been charged with pandemic-related fraud, but the case appears to be the first involving an alleged scheme within a bank.
While prosecutors have scrutinized lenders for potential misconduct, no financial institutions have been accused of wrongdoing.
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