PPP loan scam milks Raleigh small business owner for $11,500: 'I dropped my guard'

Diane Wilson Image
Thursday, March 21, 2024
PPP loan scam steals cash from Raleigh business owner
"They keep you on the phone, and they don't give you enough time to examine the evidence ... they're playing you like a fiddle, and I was played like a fiddle."

RALEIGH, N.C. (WTVD) -- A scam alert for small business owners. This scam targets business owners who got financial relief from the Paycheck Protection Program during COVID-19.

The PPP loans didn't have to be paid back if you met certain conditions. Well, scammers got their hands on who received those loans and how much they got; now they're using that information to try to scam the businesses out of cash.

For Victor Font, a Raleigh small-business owner, it started when he got a phone call claiming to be from the Wake County Sheriff's Office.

"He starts telling me that a warrant has been issued for my arrest for failure to appear in contempt of court," Font said.

At first, Font didn't think much of it, but then, he said the caller said, "It has to do with the PPP forgivable loan program, my application was flagged as fraudulent."

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Font remembered that he got a PPP loan from the government during the COVID-19 pandemic but said he wasn't convinced the call was legit until the caller gave more details.

"He knew the bank I took the money from, and that's the thing that really got to me because I thought banking information in the United States was private," Font said.

The caller then emailed Font paperwork for an order for his arrest.

"I see an arrest warrant issued by a federal court judge, in the Eastern District of North Carolina. He was also emailed paperwork which appears to be from the FDIC to recover the fraudulent PPP loans. When Font saw the paperwork, he panicked. The caller said to avoid arrest, he could pay $5,500 bail. Font made a trip to his bank and took out that money and the caller provided him with instructions to go to a specific cryptocurrency ATM and put in the cash.

"I let this guy get to me emotionally and I dropped my guard," Font said.

While still on the line with the caller, Font said the caller insisted Font needed to send another $6,000, which he paid the same way as before. When Troubleshooter Diane Wilson asked Font if anyone at the bank inquired why he was taking out so much cash he said, "They tell you don't tell the bank because as now you're putting them in the situation of aiding and abetting a criminal."

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Font got receipts to prove he sent $11,500, and he thought he resolved the issue and just needed to go to court. The next day he took a trip to the Federal Courthouse in Raleigh.

He said he asked a court official, "Can you check your docket and see if my name is in your docket?" When they checked his name, he learned it never appeared in the Federal Court docket and he was caught up in a scam.

Font said he couldn't believe the scammers got him.

"They keep you on the phone, and they don't give you enough time to examine the evidence forensically. They've got you because now they're playing you like a fiddle and I was played like a fiddle."

Font is not alone, in Idaho, the Department of Finance issued this alert about the same scheme where scammers just like in Font's case, use phony court documents to make it look like fraud surrounding the PPP loans.

Font is now speaking out to make sure others know about this scam.

"I think it's given me an opportunity to warn other small business owners across the United States because they're going for Federal PPP forgivable loan money," he said. "I was just aggravated and angry when I realized who they're going for. They're going after people I care about, and I just needed to do something about it. It's money and certainly, it hurt my pride a little bit, you know, to be taken like that, but I think it's given me an opportunity to warn other small business owners across the United States because they're going for federal PPP forgivable loan money and they're going for a demographic that is probably the least able to afford anything like this."

Font said he never realized the details of the PPP loans are all public information, as that's how scammers are getting access to the details like what bank provided the loan, and how much it was for. The red flags to remember are law enforcement won't contact you over the phone about an arrest warrant and also won't demand immediate payment, especially with cryptocurrency.

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