Yakima, Washington – Vanessa R. Waldref, U.S. Attorney for the Eastern District of Washington, has announced that Karla Padilla, 48, of Yakima, Washington, was indicted this week on seven charges of fraudulently obtaining COVID-19- Assistive devices. This indictment is the latest set of indictments resulting from the COVID-19 Relief Fraud Strike Force launched by the U.S. Attorney’s Office earlier this year.
On March 27, 2020, the President signed the Coronavirus Aid, Relief, and Economic Security Act (“CARES”). The CARES law provided a number of programs through which eligible small businesses could request and obtain emergency funding with the aim of mitigating the economic consequences of the pandemic for small and local businesses. One such program, the Paycheck Protection Program (PPP), provided state-subsidized loans to small businesses that could be forgiven as long as the proceeds were used for salaries and other eligible expenses. Another program, the Economic Injury Disaster Loan (EIDL) program, provided low-interest loans that could be deferred until the end of the pandemic to provide “bridge” financing to small businesses to maintain their operations during shutdowns and other economic circumstances caused by pandemic. The PPP and EIDL programs have provided billions of dollars in aid, the vast majority of which have not been repaid, including hundreds of millions of dollars disbursed in eastern Washington.
“COVID-19 relief programs were designed to lift our communities during a crisis, and due to the number of people and businesses requesting funding, some deserving small businesses were unable to obtain funding to keep their businesses running. “said the American lawyer. Waldref. “We created the COVID-19 Fraud Strike Force because combating pandemic-related fraud and holding those responsible who abused these programs accountable is crucial to the strength and security of our community in Eastern Washington. The Strike Force works to ensure that limited resources are used to protect our local small businesses and the critical jobs and services they provide to the community. “
In February 2022, the U.S. Attorney Waldref and the U.S. Attorney’s Office (USAO) began working with federal law enforcement agencies to create and launch a COVID-19 Fraud Strike Force that would leverage partnerships between various agencies to aggressively investigate and prosecute fraud. against COVID-19 relief programs in eastern Washington. Strike Force consists of agency representatives from USAO, Small Business Administration (SBA) Office of Inspector General (OIG), Federal Bureau of Investigation (FBI), US Department of the Treasury Inspector General for Tax Administration (TIGTA), US Secret Service, US Homeland Security Investigations, US Department of Veterans Affairs OIG, General Services Administration OIG, Internal Revenue Service, Department of Energy OIG and others. Cases investigated and prosecuted by the Strike Force have resulted in numerous charges, criminal prosecutions and civil sanctions.
The indictment, which was announced today, accuses seven cases of fraud stemming from one EIDL loan and two PPP loans that Padilla obtained in 2020 and 2021 on behalf of her alleged collector car company, identified as Queen B Collectibles. The indictment alleges that Queen B Collectibles was not a lawful company, had no employees, receipts or business operations and was not entitled to any EIDL or PPP financing, and that Padilla submitted false information for fraudulently obtaining over $ 59,000 in EIDL and PPP financing . The indictment also alleges that Padilla unsuccessfully and fraudulently attempted to procure four additional EIDLs for the Queen B Collectibles, which the SBA did not fund.
“I commend the excellent investigative work in these cases conducted by the Strike Force and especially in this case by the SBA OIG and TIGTA,” said U.S. Attorney Waldref. “We will continue to work with our law enforcement partners to vigorously prosecute those who abuse and misuse COVID-19 aids, and to strengthen our communities by protecting our small and local businesses.”
This case was investigated by the Eastern District of Washington COVID-19 Fraud Strike Force, with the SBA OIG and TIGTA as the leading investigative bodies. This case is being prosecuted by Assistant U.S. Attorney Tyler HL Tornabene, Assistant U.S. Attorney Dan Fruchter and Assistant Attorney Frieda K. Zimmerman.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt by a court of law.