Pennsylvania Man Gets 10 Years for Submitting 120 Fake PPP Applications Through 18 Ghost Businesses: The $11.5 Million Valentine's Day Massacre of Taxpayer Money
Happy Valentine's Day, America. While you were buying overpriced roses and making dinner reservations you cannot afford, the federal court system was wrapping up the sentencing of a four-person fraud ring that submitted approximately 120 fraudulent PPP and EIDL applications through 18 completely dormant businesses and walked away with over $11.5 million in your money. About 40 of those applications were approved. That is a 33% success rate on applications for companies that did not do anything, employ anyone, or exist in any meaningful way.
For context, the average legitimate small business owner spent weeks gathering documentation, tax returns, payroll records, and bank statements to get their PPP application approved. These guys submitted 120 applications for ghost companies and got 40 of them through. The SBA's fraud detection was so effective that you would have been better off replacing it with a Magic 8-Ball.
Meet the Cast of Characters
Creed White, 67, formerly of Freeland, Maryland: 10 years in prison. The ringleader. Creed owned a company called Aluminum Alloys Manufacturing, which he apparently used as the mothership for 18 dormant subsidiary businesses. These businesses had no actual operations. No employees. No revenue. No customers. They existed on paper and in the SBA's imagination, which turned out to be the same thing.
Joshua White, 44, formerly of Yoe, Pennsylvania: 96 months (8 years) in prison, $2.3 million in restitution. Joshua's job in the operation was obtaining personal identifying information from third parties to use on the applications. He also filed his own separate fraudulent PPP application for $175,000, which he promptly blew in Las Vegas. The man could not even commit fraud without immediately gambling away the proceeds. That is a special kind of commitment to bad decisions.
Joseph Bailey, 54, formerly of York, Pennsylvania: 46 months in prison. Bailey and Murray were the document guys. They created the fraudulent business records, banking documents, and tax filings needed to make 18 fake businesses look real enough for the SBA. Spoiler: it did not take much.
Kester Murray, 40, of Emigsville, Pennsylvania: Two years probation. Murray helped with the fake documents and somehow managed to get probation while everyone else got years. His lawyer earned that fee.
The Part Where the SBA Should Be Embarrassed
These were not sophisticated hackers operating from underground bunkers. This was a 67-year-old man from Maryland with a manufacturing company and 18 shell businesses that did literally nothing. No operations. No employees. No business activity of any kind. And the SBA approved 40 of their applications. Forty. That means SBA loan officers looked at applications from businesses with zero employees, zero revenue, and zero evidence of actually existing, and said "looks good, send the money."
The fraud ring operated from spring 2020 through fall 2022. That is two and a half years. Two and a half years of submitting fake applications to an agency that was apparently operating on the honor system. The Paycheck Protection Program was supposed to protect paychecks. The only paychecks these applications protected were the ones the defendants were writing to themselves.
Meanwhile, Creed White is going to prison for 10 years and Joshua White owes $2.3 million in restitution. The SBA, which approved all of this, owes nothing and faces zero consequences. The agency that was defrauded out of $11.5 million by a retiree with 18 imaginary companies will continue operating with the same procedures and the same oversight that made all of this possible in the first place.
The SBA does not have a fraud problem. It has a fraud feature.