LAS VEGAS (KLAS) — A Nevada woman pleaded guilty to filing six fraudulent COVID-19 Paycheck Protection Program (PPP) forms. Although she didn’t get the full $1 million she was seeking, she did receive four loans totaling approximately $600,000, according to a news release from the U.S. Department of Justice.
Karen Chapon, also known as Karen Hannafious, 53, submitted six PPP loan applications to three financial institutions for her companies and lied about not having a past conviction which happened to be for fraud in 2016. The DOJ reports that Chapon made numerous false statements about her companies payroll expenses and submitted false documents and when she received the money, she used some of it to buy a Mercedes Benz SUV.
Chapon pleaded guilty to one count of bank fraud and faces up to a maximum of 30 years in prison, 5 years of supervised release, restitution and a fine. A federal district court judge will determin the length of her prison term when she is sentenced on Nov. 29, 2023.
PPP loans, under the CARES Act, were designed to provide emergency financial assistance to small businesses so they could retain employees and keep afloat amid the COVID-19 pandemic.
A COVID-19 Fraud Enforcement Task Force was established in 2021 to prevent pandemic-related fraud.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the DOJ’s Disaster Fraud Hotline at 866-720-5721 of filling out this complaint form.