Miami, FL – A former employee of the Small Business Administration (SBA) from South Florida has been sentenced to federal prison for defrauding COVID-19 relief programs. Malaina Chapman, 38, was sentenced by United States District Judge Rodolfo A. Ruiz II to 54 months imprisonment, followed by three years of supervised release, for her involvement in fraudulent schemes to obtain government funds meant for pandemic relief. Chapman was also ordered to pay $1,297,178 in restitution.
Chapman, who worked as a Disaster Relief Specialist with the SBA from September 2020 to March 2021, was involved in multiple schemes to defraud the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) program, along with other local and state assistance programs. According to court documents, she submitted false loan applications to secure funds, which she then used for personal luxury expenses.
In particular, Chapman submitted a fraudulent loan application in the name of Upscale Credit Lounge, LLC, falsely reporting gross revenues and profits to secure a loan of $17,052.50. She also applied for a PPP loan on behalf of DA TRAP, LLC, falsely claiming to have four employees and an average monthly payroll, which led to a loan approval of $35,477.50. Overall, Chapman secured $230,246 through these fraudulent applications.
Additionally, Chapman conspired with others to submit fraudulent PPP loan applications, leading to losses of $837,716. Her extravagant spending included purchases from high-end brands like Louis Vuitton and Chanel, as well as a luxury resort stay in Key Largo.
The announcement was made by U.S. Attorney Hayden P. O’Byrne for the Southern District of Florida, alongside key figures from the U.S. Postal Service Office of Inspector General, the SBA Office of Inspector General, and the U.S. Department of Labor Office of Inspector General. The case was investigated by these agencies, and Assistant U.S. Attorney Daniel Bernstein prosecuted the case, with Assistant U.S. Attorney Gabrielle Charest-Turken handling asset forfeiture.
The schemes exploited programs set up under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was enacted in March 2020 to provide financial assistance to those affected by the pandemic. In response to widespread fraud, the Attorney General established the COVID-19 Fraud Enforcement Task Force in May 2021 to enhance efforts to combat such crimes.
For further details on the case, related court documents can be accessed on the website of the District Court for the Southern District of Florida under case number 24-cr-20321.
