Former SBA employee in Miami charged with PPP loan fraud

A Miami woman who was employed by the Small Business Administration (SBA) has been slapped with several fraud charges related to the pandemic relief scheme.

Malaina Chapman, 37, of Hialeah, Florida, has been charged with conspiracy to commit wire fraud, wire fraud, and bank fraud. She made her initial appearance in Miami federal court on July 10.

According to the criminal complaint, Chapman was employed as a Disaster Relief Specialist with the SBA from September 28, 2020, until her resignation on March 18, 2021. During her tenure, Chapman allegedly engaged in multiple schemes to defraud the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) program, as well as local credit unions and state programs designed to assist those affected by the COVID-19 pandemic.

"Disaster relief was intended for people in need, not for those who sought to pad their pockets and defraud the government," stated U.S. Attorney Markenzy Lapointe for the Southern District of Florida. "We will continue to hold anyone accountable who exploits and defrauds financial institutions and the government’s pandemic response."

"Today’s charges highlight our unwavering commitment to protecting the integrity of SBA programs," said SBA OIG’s Eastern Region Special Agent in Charge Amaleka McCall-Braithwaite. "Exploiting relief efforts for personal gain undermines public trust and deprives legitimate businesses of essential assistance."

Fraudulent loans

On February 10, 2021, while employed by the SBA, Chapman allegedly submitted a fraudulent loan application in the name of Upscale Credit Lounge to Lender 3. She provided a fake 2020 Schedule C form reporting gross revenues of $103,674 and a tentative profit of $81,860. Based on this information, Lender 3 approved a loan of $17,052.50. Further investigation revealed the Schedule C form was false.

On February 19, 2021, Chapman allegedly submitted another PPP loan application to Lender 3 on behalf of DA TRAP, claiming she had four employees and an average monthly payroll of $14,191. She supported her application with false IRS Employers Quarterly Tax Return forms. Lender 3 approved a loan of $35,477.50. The IRS forms were later found to be fraudulent.

Chapman also conspired with others to submit false PPP loan applications. In a related case (No. 24-CR-20079), six defendants were charged, with Raisha Kelly identified as the ringleader. Chapman allegedly aided this conspiracy by creating false IRS documents for Kelly, who then used them to submit fraudulent PPP loan applications.

In addition to PPP fraud, Chapman is charged with defrauding the State of Florida and the City of Miami’s COVID-19 Emergency Rental Assistance Programs.

On October 13, 2021, she applied for benefits under the state’s Emergency Rental Assistance program, claiming to be a tenant in Miami. Chapman submitted fraudulent documents, including a "3-day notice to pay rent or quit" purportedly signed by her deceased mother. The State of Florida approved $15,000 in payments, which were deposited into accounts controlled by Chapman.

The charges were announced by U.S. Attorney Markenzy Lapointe for the Southern District of Florida; Special Agent in Charge Jonathan Ulrich, U.S. Postal Service Office of Inspector General (USPS OIG); Special Agent in Charge Amaleka McCall-Brathwaite, U.S. Small Business Administration Office of Inspector General (SBA OIG), Investigations Division’s Eastern Region; and Special Agent in Charge Mathew Broadhurst of the U.S. Department of Labor Office of Inspector General (DOL-OIG), Southeast Region.