An orange grove in Minnesota? Woman's name and address used in PPP fraud
A Paycheck Protection Program loan to support an “Orange Grove” in Mantorville, Minn., has become a prime example of unidentified groups or entities using fake farms and other businesses to collect on hundreds of small loans. A Minnesota woman's name and address were used without her knowledge for the loan.
ROCHESTER, Minn. — Mantorville, Minn., is known for a lot of things: Its history as a stagecoach stop, its haunted opera house and the famous Hubbell House restaurant.
However, the Dodge County community, population 1,197, is not known as a place to grow oranges.
That’s why a Paycheck Protection Program, or PPP, loan to support an “Orange Grove” in the heart of the small Minnesota town has become a prime example of unidentified groups or entities using fake farms to collect hundreds of small loans.
A PPP loan for $17,000 was dispersed to “Shaila Big Fresh Oranges” on Mantorville’s Clark Street in August 2020. Another loan of $20,000 was also approved for Shaila Wanous for “sole proprietorship” orange grove earlier in April 2020, but those funds were never released.
All of this was a surprise to the young woman whose name is on the loans. Shaila Sagers — Sagers is the name she takes from her stepfather and the name she generally goes by, and Wanous is her legal name — was startled when reporters called her about the loans last week.
“I don’t know what a PPP loan is,” she said as the story was explained to her. She was unaware that her name and the address of a house that she formerly owned were used to tap into the federal money earmarked to help small businesses struggling in the wake of the pandemic. The program was created under President Donald Trump.
She is not alone in discovering that her name was used on an apparently fraudulent loan.
ProPublica, a national nonprofit news organization, investigated the loans processed by Kabbage, an online lending platform working with the Small Business Administration that handled almost 300,000 PPP loans before the first round of funds ran out in August 2020. ProPublica published an article, "Hundreds of PPP Loans Went to Fake Farms in Absurd Places," on May 8.
Reporters found 378 loans totaling $7 million were issued to one-person operations, mostly categorized as farms. However, the “businesses” that received the loans were not incorporated in the states where they were supposed to be based.
Plus many of the “farms” were as obviously absurd as Mantorville’s “orange grove.” There was a potato field in Palm Beach, Fla., and a cattle ranch on a sandbar in New Jersey.
The Mantorville “orange grove” is the only such loan that has been identified in Minnesota.
“I was just that lucky Minnesotan … Should I feel special?” said Sagers with a laugh during an interview Monday, May 24. Though she could find a shred of humor in the ordeal, Sagers said knowing her information was used in a potentially fraudulent scheme is very frightening. She's searching for ways to report this, including reaching out to Kabbage and filing a police report.
Minnesota businesses received 217,096 loans, according to SBA data compiled by ProPublica. Of these, 91% were loans of $150,000 or less. A total of 314 loans were distributed to businesses in Dodge County totaling between $20 million to $39 million in loans, according to a PPP database.
Many of the other names on the suspicious loans were people who previously had issues with identity theft, according to ProPublica reporter Derek Willis. Sagers said she didn’t know of any instances of her personal data being stolen or misused.
Why Sagers, and why an orange grove in Minnesota, are just two of the many mysteries surrounding these suspicious Kabbage loans. Where did the PPP loan money that was supposed to support U.S. businesses go?
Kabbage, which was acquired by American Express last fall, did not have an explanation for ProPublica’s findings.
“At any point in the loan process, if fraudulent activity was suspected or confirmed, it was reported to FinCEN, the SBA’s Office of the Inspector General and other federal investigators, with Kabbage providing its full cooperation,” spokesman Paul Bernardini said in an emailed statement to ProPublica.
The SBA’s Inspector General issued a report on May 6 about the issue of fraudulent PPP loans. As of Jan. 31, the SBA had referred 846,611 loans “related to an identity theft complaint (individuals who indicate that they did not apply for a loan and believe they are a victim of identity theft) and any related applications (applications with the same email address, phone number, or physical address).”
Those suspicious applications accounted for $6.2 billion in loans and $468 million in grants.
The IG report also stated that individuals, like Sagers, claiming their identities were used for PPP loan applications "have been waiting a long time, some of them for months, for a resolution on potentially fraudulent loans in their names that could negatively affect their ability to obtain credit."
Sagers is worried about how her name being linked to a fraudulent loan could affect her credit rating. No one seems to know the answer to that question.