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      in US Politics

      Of course there was PPP fraud, but the program was a crucial lifeline | Gene Marks

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      Now that the paycheck protection program (PPP) has ended, there’s a new story evolving. It seems like millions of dollars meant to prop up small businesses were fraudulently received by a bunch of bad people. Surprised? Not if you run a small business.In a press conference this week, acting assistant attorney general Brian Rabbitt announced that the Department of Justice has already charged 57 people who were trying to steal approximately $175m from the program. “The money these defendants stole was taxpayer money,” Rabbitt said. “Every dollar received was a dollar drawn from the American people’s account. Even worse, every dollar they took was a dollar we had set aside to help our fellow Americans weather one of the worst national crises in recent history. As we allege, these defendants tried to steal these funds for themselves.”The cases are something out of The Wolf of Wall Street. There’s money stolen to pay for Rolls-Royces, luxury yachts, homes and visits to strip clubs. A group in South Carolina is accused of laundering PPP money through casinos and probably using some of it to pay for heroin and methamphetamines. The Washington Post reports that an NFL player was charged with fraudulently using PPP funds to pay for Gucci and Dior items. Politico says that Rolex watches, Lamborghinis and a $3,750 diamond pinky ring were among the items confiscated from alleged abusers of the program.My goodness, who knew? Oh, that’s right. I knew. You knew. We all knew.Of course there was fraud. Anyone who applied for a PPP or an economic injury disaster loan knew this was going to happen. I have countless clients who mentioned to me just how easy it was to get approved for these grants and loans. Any business owner who claimed they were “affected” by Covid-19 could get relief, regardless of whether they were truly affected now or just worried about the future. “I could’ve told the bank anything,” one client said to me. “They didn’t care. My banker just told me to get the paperwork in and I’ll get my money.”Waiting around for government bureaucrats to come up with detailed rules and procedures would have cost much, much moreBut despite these very real scandals these government programs worked. Millions of loans were extended to small businesses that really needed them. Billions of dollars were made available – quickly – to keep many companies afloat, or at the very least provide them with a cushion to operate through these very unprecedented times.The fraud – hundreds of millions – sounds like a lot. But as a percentage of the overall program it’s probably no more or less than what my allowance is for overdue invoices that will likely not be paid. Could the fraud have been less with better policies? Sure. But waiting around for government bureaucrats – secure in their jobs – to come up with detailed rules and procedures would have cost much, much more.Of course, the political show will continue. Democrats will accuse Republicans of wasting taxpayers’ money. Republicans will argue that their actions saved the economy. Investigators will root out more celebrities and one-percenters who took advantage and present them on a platter to a hungry media looking for a tasty story.But there are bigger fish to fry … like propping up a very damaged economy. And let’s also hope that this finger-pointing circus doesn’t stop Congress from doing another round of PPP or some other type of stimulus for those businesses that really need it. Because many businesses really, really do need it. More

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      Head of USPS board of governors has high-level ties to Republican party

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      Intense scrutiny of the United States Postal Service and its likely role in November’s election is calling new attention to the chairman of the organization’s board of governors, who has deep ties to influential Republicans including the Senate majority leader, Mitch McConnell.The postal service’s smooth running is seen as key to the success of mail-in voting in 2020, with tens of millions of voters expected to use postal votes instead of going to polling stations, out of health fears due to the coronavirus pandemic. Democrats have raised concerns that Republicans are seeking to disrupt the agency’s operations in ways that could hinder mail-in voting.The USPS board of governors chairman, Robert M Duncan, is partially the target of a request by the House oversight committee. The committee, chaired by Carolyn Maloney, a Democrat from New York, is asking for documents related to how the postmaster general, Louis DeJoy, was selected for his position.Through a spokesman for the USPS board of governors, Duncan declined a request by the Senate minority leader Chuck Schumer to provide more information on the appointment of DeJoy, a major Republican donor. The 11-member USPS board of governors oversees the policies and expenditures of the postal service. The board can also fire the postmaster general.To at least one former member of the board of governors, having a sitting member, much less a chair like Duncan, with such extensive political ties that could be a conflict of interest is unprecedented. More

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      in US Politics

      Trump's postal chief ousted brother to win control of family firm, court files allege

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      Last week, as the Louis DeJoy testified before the House of Representatives about mail slowdowns around the country, the Republican congressman Jim Jordan praised the embattled postmaster general’s career as the chief executive of New Breed Logistics, saying DeJoy had an “amazing record in business”.But court documents reviewed by the Guardian allege that as DeJoy expanded his father’s shipping company into a logistics empire, he alienated his own family, pushing his brother Dominick out of the company and triggering an acrimonious legal battle with long-lasting consequences. The lawsuit and its outcome provide new insight into how Louis DeJoy came to control the company that made him wealthy and put him in a position to become a top Republican donor and, later, the postmaster general.A complaint filed by Dominick DeJoy in North Carolina state court in January 2000 alleges that Louis DeJoy:forged his brother’s signature to establish joint bank accounts in both of their names.
      forced his brother to sign away his ownership stake in New Breed.
      restructured New Breed’s ownership to exclude Dominick from the profits.
      concealed evidence of the new ownership structure from his brother.
      Family patriarch Dominick DeJoy Sr founded New Breed in 1968 as a small-time trucking concern in New York and New Jersey. After suffering a debilitating injury in 1977, he passed control of the company to his sons Dominick Jr and Michael; Louis, the eldest, was in college at the time, studying to become an accountant. Dominick did not go to college, instead taking over New Breed’s operations after graduating from high school.Louis graduated the following year and became a certified public accountant shortly after, and returned to New York to join his brothers at the helm of their father’s company. For the next decade, Louis was New Breed’s chief financial officer, handling the company’s bank accounts and tax filings.Together, the three brothers reincorporated New Breed with Louis as president and each brother owning a third of the company. They then pushed business outward from the New York area, expanding operations nationwide and moving the headquarters to North Carolina; according to the court filing, the brothers only held one in-person board meeting over the course of more than 15 years, despite Dominick and Louis living just a few miles apart in Greensboro.“Dominick Jr trusted Louis, believed he was a capable [accountant], and believed that Louis would responsibly look after all three brothers’ interests,” said the court filing.Some time in the 1990s, Louis and his brother Michael allegedly executed a kind of financial shell game to deprive Dominick Jr of his stake in the family business, according to the complaint. Michael established a new set of holding companies that did business with New Breed’s clients, and Louis allegedly told his brother Dominick multiple times that he would be entitled to a third of the proceeds from these new companies.Louis allegedly sent his own employees to intercept the documents and prevent Dominick from seeing themIn fact, according to Dominick’s complaint, the new arrangement gave Dominick no equity in the companies whatsoever.It wasn’t until April 1998, when Louis undertook to reorganize the entire company once again, that Dominick alleges he became aware of what he claimed was a scheme to defraud him. The ownership structure of the reorganized company would reduce Dominick’s share in New Breed by more than half, giving him a 15% stake instead of the one-third stake he thought he had. According to the court documents, Louis and Michael “conspired and did force” Dominick to sign the agreement.The following year, according to the court documents, Dominick made an even more shocking discovery: Louis had established multiple accounts in his name at local banks and investment trusts, forging Dominick’s signature in order to set up accounts of which they were supposedly the joint owners. Louis then deposited Dominick’s New Breed earnings into these accounts and either spent the money on his own personal expenses or funneled it back into New Breed, according to the court documents. When certain employees tried to send evidence of these fake accounts to Dominick, Louis allegedly sent his own employees to intercept the documents and prevent Dominick from seeing them.No sooner did Dominick sue Louis than New Breed sued Dominick on Louis’s behalf, demanding Dominick drop his lawsuit. Court records show that the cases were consolidated in a state business court later that year. Records also show that the presiding judge arranged in January 2001 for Dominick to depose an employee of Wachovia Securities, a bank that was considering an outside investment in New Breed. But later that month, just two days before the deposition was scheduled to take place, the brothers reached a confidential settlement and the judge dismissed the case. More