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Georgia Taxpayers Lose Out After More Waste, Fraud and Abuse is Discovered

That’s Not How It Works! That’s Not How Any of This Works: The Miller County School District was ineligible to apply for or receive a Paycheck Protection Program (PPP) loan, but district members applied for one, nevertheless, and got more than $1.1 million in taxpayer money.   

The Small Business Administration (SBA) later forgave that loan. 

Georgia State Auditor Greg Griffin announced this in an audit he published this month. 

“Government-owned entities are not eligible to receive SBA business loans, including PPP loans, and these funds should not have been received by the School District or subsequently forgiven,” according to Griffin’s audit.

“Furthermore, it was noted that when the School District submitted the PPP Borrower Application Form, the School District identified itself as both a 501(c)(3) nonprofit and a C-Corp. The School District is a governmental entity created under the laws of the State of Georgia and does not qualify as a nonprofit organization as described in section 501(c)(3) of the IRC or a C-Corp, which is formed upon filing Articles of Incorporation with the State.” 

Miller County School District officials told auditors “they were not aware that governmental entities could not apply for and receive the funds.”

Despite the SBA forgiving the loan, Griffin advised school system officials to repay it anyway.

The Miller County School District has not been hurting for money. According to data compiled by the Georgia House Budget and Research Office, the district increased its financial reserves by more than $4.1 million, or 77%, between June 30, 2019, and June 30, 2021. The district also received more than $5.2 million in federal emergency funding unrelated to the PPP loan.

DeKalb County Misconduct: A federal jury in Atlanta convicted a former DeKalb County commissioner this month for extorting a county subcontractor in connection with a $1.8 million contract.

According to the U.S. Department of Justice (DOJ), Sharon Barnes Sutton demanded monthly payments of $500 from a subcontractor in 2014. She later increased her demand to $1,000 per month. 

“The subcontractor made the first $500 payment in June 2014 at a restaurant in Decatur and the second $500 cash payment in July 2014 at Barnes Sutton’s residence. The FBI disrupted Barnes Sutton’s continued demands in August 2014,” DOJ officials said. 

“Separately, Barnes Sutton also accepted a $5,000 cash bribe from an FBI confidential source who had business before the DeKalb County Board of Commissioners.”

A federal jury convicted Sutton of two counts of extortion. A federal district court judge is scheduled to sentence Barnes Sutton in January. She faces a maximum penalty of 20 years in prison.

Fraud on a Massive Scale: DOJ officials this month announced charges against 10 defendants in multiple states, mostly from Georgia, in connection with alleged multiple money laundering, and wire fraud schemes that cost taxpayers and others more than $11.1 million. 

DOJ officials said these schemes targeted Medicare, state Medicaid programs and private health insurers.

The charges stem primarily from business email compromise (BEC) schemes. Through these techniques, individuals pose as business partners. They allegedly and fraudulently diverted money from victims’ bank accounts into accounts they or co-conspirators controlled by using spoofed email addresses and bank account takeovers to deceive victims into believing they were making legitimate payments.  

“The prosecutions allege schemes that fraudulently diverted payments intended for hospitals to provide medical services to patients. For example, fraudulent emails from accounts resembling those associated with actual hospitals were allegedly sent to public and private health insurance programs requesting that future reimbursements be sent to new bank accounts that did not belong to the hospitals,” DOJ officials said.

“Unwittingly, five state Medicaid programs, two Medicare Administrative Contractors and two private health insurers allegedly were deceived into making payments to the defendants and their co-conspirators instead of depositing the reimbursement payments into bank accounts belonging to the hospitals.”

The defendants and their co-conspirators allegedly laundered the proceeds fraudulently obtained from these health care benefit plans and from other victims by withdrawing large amounts of cash. They also allegedly layered these proceeds through other accounts they or their co-conspirators opened in the names of false and stolen identities and shell companies. They then transferred that money overseas and purchased luxury goods and exotic automobiles, DOJ officials said.