Joe Strupp|Asbury Park Press
LONG BEACH -Mayor Joe Mancini’s beachfront home on West New Jersey Avenue is hardly the spot for a cattle farm.
That didn't stop someone from claiming the nonexistent enterprise operates on the property, part ofa scam that has cost taxpayers and a federal COVID-related relief fund what is believed to be millions of dollars in fraudulent claims.
“It’s very typical when the federal government puts out free money, they throw money at people and there is no control,” Mancini —who has lived in the home 42 years, operates no cattle farm, and neither received nor applied for such federal assistance —told the Press.
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Mancini’s house was one of at least 30 Long Beach Island addresses used by fraudsters to dupe the federal government out of money earmarked for loans to COVID-impacted businesses, the mayor said.
The scam brought at least one FBI visit to the township late last month, Mancini said, but so far no arrests. FBI press officials did not respond to requests for comment.
The fraud investigation centers on the federal Paycheck Protection Program, also known as PPP, which provided loans in 2020 aimed at helping employers keep workers on salary during the pandemic.
The nonprofit website ProPublica, which first reported this story, wrote that the sham applications apparently duped lenders, including Kabbage of Atlanta, into providingloan moneydesignated for farmers.
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Nationwide, ProPublica reported, at least 378 loans totaling $7 million were provided to fake business entities, each set up as single-person operations to make them eligible: “The overwhelming majority of them are categorized as farms, even in the unlikeliest of locales, from potato fields in Palm Beach to orange groves in Minnesota.”
ProPublica said it found no link between the scammers and the actual property owners; its reporting blamed a lack of due diligence byprivate lendersand the federal government, which placed a premium on getting money into the hands of employers quickly, rewarding fast-moving lenders accordingly.
“There’s no farming here,” Mancini told the website when itinformed him of the scandal, ProPublica reported. “We’re a sandbar, for Christ’s sake.”
Along with Mancini’s property, which was submitted under the fake name “Beefy King” and received the maximum $20,567, there was “Ritter Wheat Club” in Barnegat and “Deely Nuts in Beach Haven,” falsely claiming to be a wheat farm and a tree nut farm, respectively, according to ProPublica.
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Each received $20,833, the maximum amount available, according to ProPublica. There was also “Tomato Cramber” in Brielle, receiving$12,739, and “Seaweed Bleiman” in the Manahawkin section of Stafford, receiving$19,957.
ProPublica said there is no record thebusinesses exist in New Jersey. It added that the property owners it spoke to for the story expressed surprise that their addresses were used by applicants.
Mancini told the Press that federal officials had informed former Police Chief AnthonyDeely, who retired in early May, that at least 30 local addresses were fraudulently used by scammers.
“I debriefed my chief and he spoke to them because I had a time conflict,” Mancini said. “If there was anything breaking on criminal that had to be pursued they would have notified us.”
Deely could not be reached for immediate comment.
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The mayor said he first heard about the scam when a ProPublica reporter called him and “asked if I took out any PPP loans and then he asked if I had a cattle ranch.”
Mancini, who runs a development company and works in real estate, said he had neither received nor asked for any such loans.”No money hit any of my accounts;there is no lien on my property;no signatures or email. That is what puzzled me, it was almost an instant loan.”
But federal officials are reportedly investigating several lenders who administered the loans for the federal governmentand allegedly allowed payments to be made to the false filers without checking out their claims.
“All of these loans to nonexistent businesses came through Kabbage, an online lending platform that processed nearly 300,000 PPP loans before the first round of funds ran out in August 2020, second only to Bank of America,” ProPublica reported.
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Reuters reported May 10 that an investigation is being led by the U.S. Justice Department's civil division and is examining whether Kabbage and other companies “miscalculated how much aid borrowers were entitled to from the Paycheck Protection Program ...due to confusion over how to account for payroll taxes.”
The $780 billion program was launched by the Trump administration to help save jobs when the economy was shedding millions of them during spring 2020, when the pandemic first hit. A government reportin January estimated that the Small Business Administrationapproved loans for 55,000 potentially ineligible businesses; 43,000 obtained more money than their reported payrolls justified.
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Back in Long Beach, Mayor Mancini says the scandal is just another sign of poor program management by the government: “You get fraud in everything that they do. There’s nobody at the helm.”
Joe Strupp is an award-winning journalist with 30 years’ experiencewho covers education and Monmouth County for APP.com and the Asbury Park Press. He is also the author of two books, including Killing Journalism on the state of the news media, and an adjunct media professor at Rutgers University and Fairleigh Dickinson University. Reachhim at jstrupp@gannettnj.com and at 732-413-3840. Follow him on Twitter at @joestrupp
