A Little Rock woman admitted to bank fraud Thursday in federal court after obtaining nearly $2 million in loans intended to provide covid-19 relief for small businesses, prosecutors said.
Ganell Tubbs, 41, pleaded guilty to one count of bank fraud in U.S. District Court in Little Rock, U.S. Attorney Cody Hiland announced.
Tubbs admitted in court that she claimed to have operated two existing businesses — The Little Piglet Soap Company and Suga Girl Customs. In reality, neither company was in good standing, according to court documents.
In late April, Tubbs submitted a Paycheck Protection Program, or PPP, loan application, alleging that Suga Girl Customs had paid nearly $1.4 million in compensation during the first quarter of 2020. As a result of that application, she was approved for a loan of more than $1.5 million, prosecutors said. Days later, she used proceeds from that loan to make an $8,000 payment on her student debt and spent another $6,000 during an online shopping spree, according to the U.S. attorney’s office.
Documents revealed that Tubbs also wired $150,000 to a relative. That same relative was told by Tubbs that she had won the lottery, according to the FBI, which led the investigation into the fraud.
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On May 5, Tubbs submitted another loan application on behalf of The Little Piglet Soap Company, prosecutors said. Based on the false representations she made in the loan application, The Little Piglet Soap Company received a $414,375 loan, according to court documents.
“This defendant took almost [$2 million] that were intended to keep small businesses afloat during COVID-related shutdowns,” Hiland wrote in a prepared statement late Thursday. “Hardworking Arkansans needed these funds to pay their employees and support their families, and we will not tolerate fraudsters who lie to obtain these funds and then use them for their personal enjoyment.”
Business owners could apply for PPP loans after the Coronavirus Aid, Relief and Economy Security Act — also known as the CARES Act — was signed into law March 27. It was designed to provide emergency financial assistance to those suffering from the economic hardships related to the covid-19 epidemic.
Federal agents executed a search warrant June 22 at Tubbs’ home, at which time she admitted to the fraud, according to court documents.
The Little Piglet Soap Company was registered in August 2013 and Suga Girl Customs was registered in January 2018, but both businesses recently showed a revoked status with the Arkansas secretary of state, officials said.
Tubbs was indicted by a federal grand jury July 7. Originally, she was charged with two counts of bank fraud, two counts of making a false statement on a loan application and one count of engaging in a monetary transaction with proceeds of unlawful activity.
During Thursday’s hearing, she pleaded guilty to one count of bank fraud in exchange for the dismissal of the other four charges, Hiland said.
In 2011, Tubbs filed a petition for Chapter 7 bankruptcy protection, according to court records.
A sentencing date has not been set.