Discussions of a federal investigation into a bribe program involving fraudulent loans for pandemic relief prompted Mount Vernon Mayor Shawyn Patterson-Howard to order all employees who may have been involved to alert city hall officials.
In a note to all employees on Tuesday, Patterson-Howard wrote:
“If you have applied for and / or received a loan, grant, or ANY form of payment as part of the recently discovered ‘process’ which asked you to reimburse part of the disbursement as an application fee, you will need to contact your commissioner. , Human Resources Commissioner Holly Francis-Merritt or Chief of Staff Darren Morton immediately. “
This follows weeks of discussions about an investigation into a cheeky effort in the spring to start bogus businesses hit hard by the pandemic and collect federal loans or advances for them. Dozens of city employees, including many police officers, could have participated.
Public information officers at the U.S. Attorney’s Office in Manhattan and the FBI’s field office in New York City said they were not familiar with such an investigation.
Nationally, there has been widespread fraud related to federal pandemic relief efforts, including the Small Business Administration’s Economic Disaster Loan program. This made available up to $ 10,000 in grants almost immediately and $ 2 million in loans, and was increased by the $ 660 billion paycheck protection program established in Coronavirus Aid, Economic Relief and Security. Act.
The money was intended only for companies severely affected by the pandemic.
Federal prosecutors in Manhattan last month charged 57 people with fraudulently receiving $ 175 million in PPP loans. Among the many fraud charges across the country, a North Carolina man was arrested this month on charges of obtaining loans for 14 bogus companies he started with names borrowed from “Game of Thrones” “.
Rumors have circulated in Mount Vernon in recent weeks of an investigation based on an aggressive sales pitch by at least one police department employee that spread the word about the availability of pandemic loans in the spring. This employee, or someone associated with him, is also said to have completed the applications using the employees’ genealogical information and getting some of the loan money for their efforts.
The employees who got the loans didn’t actually have businesses of their own or had businesses that weren’t affected by the pandemic.
The employee who approached others to apply for the loans owns a business and told Journal News / lohud earlier this month that she applied for a loan but got a grant instead. She admitted to telling others about the program, but said she didn’t know anything about commissions received or any fraud related to the effort.
Police Commissioner Glenn Scott told the newspaper earlier this month he was not aware of any investigation. He said that although pandemic loan fraud was a problem nationwide, he didn’t think there was such a problem in Mount Vernon.
On Sunday evening, a city spokesperson insisted the allegations were not true. The following afternoon, Patterson-Howard went live to Facebook to respond to speculation that arrests were imminent, saying the “rumors and innuendos” were being investigated but no one from law enforcement federal, state or county officials had contacted city officials.
“No one has been arrested. No one has surrendered,” she said in a nearly 4-minute update, adding at the end, “we pray for the best, but if it’s true, we are prepared to face the worst. “
Scott later said he contacted law enforcement and could not confirm the existence of an investigation. He said his department has a good relationship with federal agencies – and suggested that an FBI report to Police HQ on Friday as part of the investigation was wrong. There was an FBI agent that day, he said, but it was to perform a background check on a town detective who was about to join an FBI task force.
The problem comes as the new mayor has tried to wipe the city away from years of internal political strife and government dysfunction. She is due to deliver her first state of the city speech on Wednesday evening.
Police reform was also a priority and the prospect of the police being strongly represented in any lending program would draw even more attention to this effort.
The department has been tarnished by the independent arrests of four of its members over the past year. But more so by the revelation of secret tapes by a police whistleblower of fellow police officers talking about false arrests, filed evidence, thefts from suspects and excessive force, mainly by a detective from the narcotics unit. .
Although no charges resulted from this investigation, Scott disbanded the Narcotics Unit and, months later, put the detective on duty.
Last week, the mayor announced the formation of a police reform commission, as mandated by Governor Andrew Cuomo. But an independent group, the Mount Vernon Coalition for Police Reform, argues that city officials did not act quickly enough to reshuffle the department.