Nearly $1 Million In Fraudulent Pandemic Relief Loans Leave Johnson County

In September, Suzanne Sanders received a notice in the mail. It said she needed to start paying back a $9,100 coronavirus relief loan to the federal Small Business Administration (SBA) by August 2021.

The notice went on to say the loan had gone to support her small business: Suzanne Sanders Farm. But Sanders doesn’t own a farm. She doesn’t live on one either. She lives in a two-story suburban tract home in Lenexa, and she never took out a pandemic relief loan.

She reported the notice to the SBA, but each month since September, Sanders says she has continued to receive repayment notices.

“I’m just sick about it,” Sanders said. “And I don’t even know what else to do, because you only have so much time during the day to try to resolve things like this. It’s disturbing to think that people can just get a loan without signing or anything.”

Hundreds of thousands of dollars in fraudulent loans

Starting in March 2020, the SBA made billions of dollars of pandemic relief available through COVID-19 Economic Injury Disaster Loans, or EIDL.

The loans were made available to small businesses, including agricultural operations, so that the owners could pay basic operating expenses, such as inventory or office supplies. It was such a loan for which the entity named Suzanne Sanders Farm had applied.

To speed up relief distribution, the SBA relaxed internal controls, according to the SBA’s own Office of Inspector General. The office reported in October that this resulted in “billions of dollars in potentially fraudulent loans and loans to potentially ineligible businesses.”

This fraud has impacted dozens of Johnson County residents.

A Shawnee Mission Post analysis revealed that the addresses, and in most cases the names, of at least 35 Johnson County residents have been used to apply for loans to apparently non-existent or fake farm businesses. All told, the fraud in these cases topped $940,000.

That’s only about 0.3% of the total $295 million in EIDL payments approved for Johnson County entities. But for individuals like Sanders, who worry about being held liable for a loan she never took out, it’s a big headache.

Real-world consequences

In December, the SBA was court-ordered to release the names, addresses and loan amounts of all loans made under EIDL as well as the larger and more well-known Paycheck Protection Program, or PPP, which went towards helping small businesses keep employees on payroll.

To find instances of fraud, the Shawnee Mission Post narrowed this database to EIDL loans applied for in Johnson County. Then, the Post narrowed that list to those with “farm” in the applicant name. If the business did not appear in a Google search or the Kansas Secretary of State’s Business Entity Database, the Post reached out to the owner of the property.

The loan amounts fraudulently taken out using these Johnson County residents’ addresses range from $3,600 to $123,500.

The addresses accompanying the entity’s application were, in most cases, typical residential homes like Suzanne Sanders’, but were listed as vegetable farms, tomato farms, poultry farms and potato farms.

“As much as I love potatoes, and would love to make vodka, that is not me,” said Paige Darby of Olathe.

The database lists a $9,800 loan to Paige Darby Potatoe Farms.

Police investigating some cases — but finding fraudsters is difficult

Local law enforcement agencies say they have only heard of a few cases related to such alleged pandemic relief fraud.

The Shawnee Police Department was contacted by at least one resident who called after being notified by the Post that their address was in the federal database. The Olathe Police Department says it has received two reports in the past month, one for a loan of $68,600 and another for $75,600.

Police departments in Lenexa, Overland Park and Shawnee all told the Post they have received no reports or heard no complaints about this type of scam.

It’s not…