Covid aid fraud carries a 41-month sentence
A Little Rock woman was sentenced in federal court on Friday to more than three years in prison and $ 14,000 in bank fraud restitution after admitting to receiving nearly $ 2 million in loans earmarked to relieve small businesses during the covid-19 pandemic.
Ganell Tubbs, 41, pleaded guilty to bank fraud late last year after claiming around $ 1.9 million for businesses no longer in good standing thanks to two separate loans from the Paycheck Protection Program, or PPP, according to court documents.
U.S. District Judge Brian S. Miller said in Friday’s proceedings that it was difficult for him to decide on the sentence, which could have resulted in up to 30 years in prison and a fine of $ 1 million.
Tubbs applied for the loans in April and May 2020 for two companies, Suga Girl Customs and The Little Piglet Soap Company, which she claimed to be leaving her home.
Court documents show that Tubbs’ first claim submitted to Celtic Bank said Suga Girl Customs had an average monthly payroll of $ 607,555 for 210 employees. Another app at Cross River Bank for The Little Piglet Soap Company said she made an average of $ 165,750 for 36 employees.
Tubbs used the funds from the loans to pay UAMS Student Financial Services $ 8,000 and purchased $ 6,000 of items from Apple, Michael Kors, Sephora, Ugg, Nike and other companies, according to the documents.
A wire of $ 150,000 was also documented to a niece of Tubbs, according to the records. Tubbs told the niece that she won the lottery.
Business owners could apply for PPP loans after the Coronavirus Aid, Relief and Economic Security Act, also known as the CARES Act, was enacted on March 27. It was designed to provide emergency financial assistance to those suffering from the economic hardship associated with the covid-19 epidemic.
Miller said in Friday’s hearing that the government was able to find the fraud quickly and clawed back all loans except $ 14,000.
“You start to ask questions,” Miller said. “Should Miss Tubbs take advantage of the fact that the government has figured this out quickly?” “
He also asked why the bank gave the money to Tubbs.
“If I walk into a bank and say I need two million dollars and I have two businesses, in what world should a bank write me a check for two million dollars and return them? responsible taxpayers, ”Miller said.
The banks made the loans with little or no documentation, Miller said.
“On the other side of that equation, she went in and defrauded them,” Miller said. “It was a bad fraud, but she got in there and did it.”
The case was unusual, he said.
“I’m going through all of these different things and how did we even get here today, and it’s ridiculous,” Miller said.
Based on the lack of criminal history and early admission to the crime, Miller said court guidelines suggested a prison sentence of 41 to 51 months and up to $ 1 million in fines.
“This is one of those cases, if I didn’t have the guidelines I don’t know what I would do,” Miller said. “I don’t know if I would give him more time. I don’t know if I would give him less time.”
Defense lawyer Molly K. Sullivan of the Federal Office of Public Defenders has asked the judge to give Tubbs the lower end of the guidelines due to early acceptance and lack of criminal history.
She also asked that the fines not exceed the required $ 14,000 because Tubbs did not have the capacity to reimburse the restitution. She also requested that the accused be sentenced to jail in Aliceville, Alabama, where she would be close to her family.
Tubbs wiped away tears during the procedure as her mother sat quietly but attentively in a row behind her.
When Miller asked her if she wanted to speak, Tubbs fought back the big tears to say one line: “I just want to apologize to my mom.”
Miller continued to cite Tubbs’ lack of criminal history throughout the proceedings.
“It’s not like she’s someone who’s been stealing from people for 10 years,” he said. “Three years in prison is like 20 years for other people. Some people can go to prison and knock those years out like nothing has happened. For someone like Miss Tubbs, it’s really an environment. hard.”
Miller recommended that Tubbs attend a mental health counseling program during his 41-month jail term. He also ordered her to participate in a mental health program while on probation for two years.
Tubbs would be required to submit all requested financial documents, including tax returns, during supervision, he said. It will also not be allowed to incur credit charges without prior approval.
Fifty percent of all finances on Tubbs’ books in prison will be wiped out for the $ 14,000 return, Miller said. Tubbs will also pay 10% of any income earned during his supervised release.
The judge recommended that Tubbs serve her sentence in Aliceville and set a date of April 26 for her to report to the jail she has designated.