Tallassee mayor says some PPP loans went to ‘fraudulent businesses’
TALLASSEE, Ala. (WSFA) - The Paycheck Protection Program provided by the U.S. Small Business Administration is meant to help businesses keep their workforce employed and doors open during the COVID-19 pandemic.
But according to Tallassee Mayor Johnny Hammock, some businesses in their city who applied for the PPP loan were fraudulent.
A recent report released by the SBA provides a detailed list of all of the businesses within the city limits of Tallassee who received PPP loans during the coronavirus pandemic.
After further investigation of the list, Hammock discovered that 92 out of 339 businesses in the city limits that received PPP loans did not have a business license on file with the city.
“When I first saw the list of who received the PPP loans in the 36078 zip code, which is Tallassee, I noticed it was a lot of fraudulent businesses, a lot of businesses that we don’t have business license for,” Hammock said.
Hammock said those 92 businesses should not have been receiving that money.
“When I looked at it for the first time I was very disappointed in some of the people in Tallassee,” Hammock said. “It’s a lot of people that I know that do not have a business. It’s people that live in government subsidized housing that got this money that don’t have a business, it’s a lot of people that are in our court system that owe the court thousands of dollars and they’re constantly in and out of our court system.”
“Most of them are just flat out fraud,” Hammock said.
Hammock said there are “legitimate” businesses within the city who applied for that loan and did not get it.
“This was meant to help the people that needed it, business owners that needed to pay their employees,” he said. “I think it’s jst been abused and I can’t believe I’m the only mayor really sounding off about it.”
Hammock said legitimate businesses pay various local, state, and federal taxes and that it is unfair that these other businesses are not paying taxes to support the local, state and federal governments.
Hammock said this will financially impact the city and could eventually impact residents.
“These people have fraudulently robbed the government and got this money and they’re sitting at home on their butts and not working,” Hammock said. “So there’s going to be less taxes coming in, inflation’s making the prices of materials go up, so eventually everything’s going to go up. So we’re all going to pay it back, not just the thieves that took it.”
The problem in Tallassee is not an isolated incident. The Federal Trade Commission reported in March that at least $382 million had been lost in various forms of COVID-19-related fraud. Hammock said he will stop at nothing to make sure his city isn’t taken advantage of.
“I’m not going to stop until I exhaust all my resources to make sure these people pay it back,” Hammock said.
Hammock said right now the city is sending letters to the 92 businesses in the mail. They have 30 days to comply to get a business license or they will turn them over to the municipal court.
WSFA 12 News reached out to the U.S. Small Business Association and they said they cannot comment on specific claims, nor about ongoing or potential investigations or litigation.
The U.S. Small Business Administration sent us the following statement:
“The U.S. Small Business Administration takes allegations of fraud very seriously. As is the case with all SBA programs, our Office of the Inspector General is responsible for providing independent, objective oversight, including the investigation of allegations of criminal violations or wrongdoing, typically partnership with the U.S. Attorney’s Office. The SBA cannot comment on specific claims, nor about ongoing or potential investigations or litigation.”
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