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The Justice Department has made at least 41 criminal complaints in federal court against nearly 60 people, who collectively took $62 million from the Paycheck Protection Program by using what law enforcement officials said were forged documents, stolen identities and false certifications, the New York Times reported. They are just “the smallest, tiniest piece of the tip of the iceberg,” said Hannibal Ware, the inspector general of the Small Business Administration, which led the program. But with their ostentatious spending and clearly faked records, those examples have also been the easiest to spot. The Paycheck Protection Program, a centerpiece of the CARES Act, poured $525 billion into the economy in just four months before coming to an end. More than five million businesses received loans, which could be forgiven if used for payroll and certain other expenses. Now, that hastily created program in response to the initial financial shock of the COVID-19 pandemic is entering its next messy stage, one that lenders and government officials expect to take years: the hunt to recapture illicitly obtained cash. The challenge facing scores of state and federal agencies is enormous. The Small Business Administration’s fraud hotline, which received fewer than 800 calls last year, has already had 42,000 reports about coronavirus-linked graft. But many of the cases investigators ultimately pursue will not have telltale clues like expensive watches and Italian sports cars bought by people who said their small businesses were in need of help. Future cases will be more thorny, involving owners who tried to exploit gray areas in the program’s rules or the desperation of their employees. Under the initial rules, borrowers who wanted the loans forgiven had to spend most of the money within eight weeks. Those limits frustrated many owners, and some appear to have tried to quietly break the rules, according to the workers, who asked not to be identified to protect their livelihoods.

A federal small-business pandemic emergency loan program that has been criticized for delays and fraud has focused attention on the role of a small consulting firm that earned nearly $800 million in fees and subcontracted the work to a unit of the nation’s largest mortgage lender, the Wall Street Journal reported. Federal government contracting records show the Small Business Administration has awarded at least $770 million to RER Solutions Inc. of Herndon, Va., to process loans and grants for small businesses affected by the coronavirus pandemic under the SBA’s Economic Injury Disaster Loan program, or EIDL. That is a steep increase from a $10 million contract the company initially signed with the SBA in 2018. The bulk of that loan-processing work was then subcontracted to Rocket Loans, a unit of lending giant Rocket Cos., which also owns Quicken Loans, according to both Rocket and federal officials, though its name doesn’t appear in any of the publicly available documents on the federal contracts awarding the work to RER. Under the EIDL program, more than 3.6 million loans worth $188 billion have been issued to date since the pandemic, in addition to $20 billion in grants to 5.8 million companies, according to the SBA. The SBA is the administrator of the program, which is separate from the SBA’s $670 billion Paycheck Protection Program, where banks and other financial services companies act as intermediaries in assessing applicants and processing loans. Groups representing small businesses say the EIDL loan program has been plagued by delays. Karen Kerrigan, who heads Small Business & Entrepreneurship Council, an advocacy group, told House lawmakers in June the execution of EIDL went badly, leaving hundreds of thousands of small-business owners ”demoralized, confused and angered.” She says the program has improved since. The EIDL program also came under criticism from the SBA’s inspector general, which in a July report cited “pervasive fraudulent activity,” pointing to more than 5,000 instances of suspected fraud from banks where EIDL funds were deposited in customer accounts. The IG estimated that about $250 million in loans and grants have gone to businesses that could be ineligible.

Blue Star Donuts, the artisanal doughnut shop that grew to nearly a dozen locations in Oregon and California, has filed for chapter 11 protection, The Oregonian reported. In June, Blue Star announced that the COVID-19 pandemic had forced the company to close of a handful of its Portland-area locations, including its sprawling 2-year-old headquarters in downtown Portland. The doughnut shop is now down to four Portland-area locations and three in Southern California.

COVID-19 patients' care is supposed to be covered under a program President Trump announced this spring as the coronavirus pandemic was taking hold, the New York Times reported. “This should alleviate any concern uninsured Americans may have about seeking the coronavirus treatment,” Trump said in April about the program, which is supposed to cover testing and treatment for uninsured people with COVID-19, using money from the federal coronavirus relief package passed by Congress. The program has drawn little attention since, but a review of payments made through it, as well as interviews with hospital executives, patients and health policy researchers who have examined the payments, suggest the quickly concocted plan has not lived up to its promise. It has caused confusion at participating hospitals, which in some cases have mistakenly billed patients who should be covered by it. Few patients seem to know the program exists, so they don’t question the charges. And some hospitals and other medical providers have chosen not to participate in the program, which bars them from seeking any payment from patients whose bills they submit to it. Large numbers of patients have also been disqualified because COVID-19 has to be the primary diagnosis for a case to be covered (unless the patient is pregnant). Since hospitalized Covid patients often have other serious medical conditions, many have other primary diagnoses. At Jackson Health in Miami, for example, only 60 percent of uninsured COVID-19 patients had decisively met the requirements to have their charges covered under the program as of late July, a spokeswoman said.

Casino operator MGM Resorts International informed its staff on Friday that it would lay off 18,000 furloughed employees in the U.S. as the coronavirus-induced travel curbs hurt its operations, Reuters reported. The company will start the process today, according to a letter from Chief Executive Officer Bill Hornbuckle to employees and seen by Reuters. MGM employed nearly 52,000 fulltime and 18,000 part-time people in the U.S. as of Dec. 31. “Federal law requires companies to provide a date of separation for furloughed employees who are not recalled within six months. Regrettably, August 31, marks (that) date,” Hornbuckle said in the letter. MGM was forced to close all of its casinos and furlough about 62,000 of its workforce in the United States in March due to the lockdowns. It brought back tens of thousands of employees when many of its casinos opened for business as the restrictions eased, but it still had to leave out 18,000 of them.

Coca-Cola Co. on Friday joined a list of big U.S. companies laying off thousands of workers in response to the coronavirus crisis, offering voluntary deals across its businesses and promising to halve its number of operating units, Reuters reported. The company was offering voluntary redundancy to 4,000 workers in the U.S. and Canada and would offer similar deals in other markets, it said in a statement, while also signaling other layoffs were likely to follow. “The voluntary program is expected to reduce the number of involuntary separations,” the world’s largest beverage maker said, adding that the global severance programs would incur expenses of about $350 million to $550 million. The company, battling a hit to sales from closures of bars, restaurants and cinemas where it normally sells heavily, said it would have nine operating units that would sit under four geographical segments, along with global ventures and bottling investments divisions. Coca-Cola last month reported a 28 percent slump in sales in the “most challenging” quarter of the year due to coronavirus-triggered closures of restaurants, theaters and sports venues.

The White House wants the Treasury Department to ensure that companies, not workers, will be held liable for paying the employee portion of the payroll tax when President Trump’s tax holiday ends, the New York Times reported. The Treasury Department has not been willing to issue such guidance, though it is unclear why. Businesses, which have been fielding questions from their employees about when the tax cuts will begin, would prefer that Congress legislate any changes to tax policy. It is also not clear that the White House would have the legal authority to shift the tax burden in such a manner. The president’s executive order suspends payments, but employees will be on the hook to pay the deferred taxes back when the tax holiday ends. Many companies are expected to opt out of participating to avoid sticking their employees with a giant bill next year.

Colombia’s disaster fund will lend as much as $370 million to Avianca Holdings SA to help with its restructuring after a halt in travel during the Covid-19 pandemic forced the company into bankruptcy, the country’s finance ministry said in a statement, Bloomberg News reported. The emergency mitigation fund’s committee approved the government-backed loan, due November 2021, under the framework of debtor-in-possession financing the company is seeking in its U.S. bankruptcy court case, the ministry said in a statement on Friday. Avianca, one of the biggest airlines in Latin America, filed for chapter 11 protection in New York in May after travel bans forced the airline to ground its fleet. It reached an agreement with lenders this month for a substantial part of the $2 billion it’s trying to raise as it restructures. The company is offering one of the highest premiums yet seen on a $1.3 billion debtor-in-possession loan.

The company that operates the Trump International Hotel in Vancouver said on Friday that it has filed for bankruptcy, blaming the coronavirus pandemic for lost revenue and financial hardship, Reuters reported. TA Hotel Management Ltd Partnership (TAHMLP), a unit of Malaysia-based TA Global Bhd, said that the temporary closure since March due to COVID-19 impacted the hotel’s business. Vancouver-based developer Holborn Group, which owns the tower, licensed the Trump name for the project under a 2013 agreement. The 69-story luxury hotel in downtown Vancouver opened in 2017 amid protests against U.S. President Donald Trump. “Its ongoing expenses since the outbreak of COVID-19 and lack of revenue has placed TAHMLP into a position of insolvency,” a statement on the company website said. Documents filed in Canada on Thursday showed that TA Hotel Management Ltd Partnership owes C$4.79 million ($3.66 million) and has total assets of C$1.1 million. TA Hotel Management leased the hotel premises and operated it, according to the statement.

Neiman Marcus Group Ltd. is suing Marble Ridge Capital LP after a bankruptcy watchdog said the hedge fund’s founder illegally pressured an investment bank to drop its bid on a lucrative piece of the department-store chain’s business so he could buy it himself, WSJ Pro Bankruptcy reported. In the suit filed on Wednesday in U.S. Bankruptcy Court in Houston, Neiman is seeking more than $60 million in damages from the hedge fund. The retailer is also asking a judge to subordinate Marble Ridge’s claims against Neiman during its bankruptcy proceedings. Because unsecured creditors aren’t being paid in full, ranking the hedge fund’s claim below the other creditors would essentially wipe out its Neiman holdings. Marble Ridge, created by Daniel Kamensky, is liquidating after a bankruptcy watchdog said that the hedge-fund founder suppressed a bid for shares in Neiman’s valuable MyTheresa e-commerce unit from investment bank Jefferies LLC. Marble Ridge had already offered to acquire the shares at a discount and Jefferies was prepared to pay more. Because of Marble Ridge’s illegal actions, the lawsuit says, Neiman’s creditors lost out on the opportunity to cash out their MyTheresa shares for $42 million to $54 million. The Neiman lawsuit is part of a long-running dispute between the hedge fund and the department-store chain’s owners over the MyTheresa business.