A Houston Funeral Director, Jase Gautreaux, has been charged with fraudulently seeking over $13 million in Paycheck Protection Program (PPP) loans.
Mr Gautreaux allegedly submitted several fraudulent loan applications to multiple banks. He applied on behalf of a business that did not exist and sought loans for a business with which he had no affiliation. He allegedly falsified the number of employees, payroll expenses, tax documents and bank account information. Mr Gautreaux ultimately received over $1.6 million in PPP funds.
Mr Gautreaux, 38, is currently a Funeral Director at Wingate Funeral Home. According to LinkedIn, until January 2020, he spent 11 years in Procurement at Tema Oil and Gas (which became part of Rosehill Resources in 2017). During that time, he also appeared to operate his own funeral home business.
Bank fraud is a crime punishable by up to 20 years in prison. Making a false statement within the jurisdiction of a federal agency carries a potential maximum sentence of five years in prison.
In the past day, there were a number of other people around the country who were charged with PPP fraud. These included;
- Virginia couple ($1.4 million paid out), arrested as they attempted to flee to Poland.
- Dayton, Ohio businesswoman ($1 million paid out but flagged and recalled by the bank).
- New York opthalmologist ($630,000 paid out) already under indictment for healthcare fraud.
- ‘Arkansas Mo’, who appeared in Love & Hip Hop: Atlanta ($3.7 million). He used some of the money to lease a Rolls-Royce
- Fahad Shah, a Dallas-area man, was charged with a fraudulently seeking $3 million in PPP loans. He allegedly used part of the money to buy a Tesla.
The Texas Health and Human Services Commission has agreed to pay the federal government $15.3 million to resolve allegations that it violated the False Claims Act in its administration of the Supplemental Nutrition Assistance Program (SNAP). SNAP was known as the Food Stamp program until 2008.
Under SNAP, the US Department of Agriculture provides eligible low-income individuals and families with financial assistance to buy nutritious food. Although the federal government funds the benefits, it relies on the states to determine whether applicants are eligible and to administer the scheme.
Furthermore states are required to perform quality control to ensure that eligibility decisions are accurate. The federal government also pay performance bonuses to those states that report the lowest error rate and the most improved error rate. The state of Texas contracted with Julie Osnes Consulting LLC (based in South Dakota) to provide advice and recommendations designed to lower its quality control error rate. The federal government alleged that the recommendations injected bias into the quality control process, resulting in the state receiving performance bonuses in 2010, 2013 and 2014 for which it was not entitled.
This is the fourth state that the Federal government has settled with. All hired Osnes Consulting. The other states are Virginia ($7 million), Wisconsin ($7 million) and Alaska ($2.5 million). The government has also settled with Julie Osnes herself ($0.8 million). The state of Mississippi is also under investigation.
Although the details concerning the Texas program have not been released, from reporting in other states, it is alleged that the consulting firm would pressure state employees to either reclassify errors as correct or omit them from the sample. The states would select a quality control sample and the federal government would audit a subset of the state’s sample.