A former Small Business Administration (SBA) employee, Malaina Chapman, 38, of Hialeah, was sentenced Friday to over four years in prison for orchestrating a scheme that defrauded pandemic relief loan programs.
U.S. District Judge Rodolfo Ruiz in Miami also ordered Chapman to repay approximately $1.3 million to the SBA.
Chapman pleaded guilty in March to conspiracy to commit wire fraud, admitting to submitting fraudulent COVID-19 loan applications and advising at least six others on how to exploit SBA emergency loan benefits.
Her associate, Raisha Kelly, 44, from Palm Beach County, was sentenced in May to five years after a federal jury convicted her of wire fraud for submitting falsified tax returns on loan applications. Kelly was ordered to repay about $445,000.
Prosecutors said the two South Florida women stole more than $1 million in federal government loans meant to support small businesses during the pandemic.
Assistant U.S. Attorney Dan Bernstein highlighted that Chapman earned around $57,000 annually as an SBA disaster relief specialist when she defrauded multiple government relief programs at federal, state, and local levels.
Bernstein revealed Chapman spent the stolen funds on luxury brands like Louis Vuitton and Chanel and leased a BMW for over $2,300 monthly, rather than on legitimate business expenses or payroll.
In sentencing documents, Bernstein described Chapman as “a financial predator who views government relief programs as her personal piggy bank,” noting she never hesitated to steal from trust-based programs.
South Florida has been a major hotspot for PPP loan fraud, with many convicted of fabricating applications to steal millions, often spending the funds on luxury cars such as Lamborghinis, Teslas, and Porsches.
Chapman worked for the SBA from September 2020 until her resignation in March 2021, exploiting PPP, Economic Injury Disaster loans, credit unions, and rental assistance programs.
She is the first former SBA employee nationally to be charged for defrauding the agency that distributed over $800 billion in pandemic loans.
Chapman also promoted side businesses in real estate and credit services on Instagram, using the handle [Instagram handle redacted].
