MIAMI — A former employee of the U.S. Small Business Administration (SBA) has been sentenced to more than four years in federal prison for defrauding multiple COVID-19 relief programs to fund a lavish lifestyle.
Malaina Chapman, 38, of South Florida, was sentenced on June 13 by U.S. District Judge Rodolfo A. Ruiz II to 54 months in prison, followed by three years of supervised release. She was also ordered to pay $1,297,178 in restitution.
According to court records, Chapman worked as a Disaster Relief Specialist for the SBA from September 2020 to March 2021. During this time, she orchestrated and participated in a series of fraud schemes targeting the Paycheck Protection Program (PPP), the Economic Injury Disaster Loan (EIDL) program, and various local and state relief efforts aimed at assisting those affected by the pandemic.
In one instance, Chapman submitted a fraudulent PPP loan application under the name “Upscale Credit Lounge, LLC,” falsely claiming that the business earned over $100,000 in 2020. Based on fabricated tax documents, she secured a $17,052 loan. Just days later, she submitted another false application on behalf of a different entity, “DA TRAP, LLC,” claiming to have four employees and an average monthly payroll of over $14,000, resulting in a $35,477 loan.
In total, Chapman obtained more than $230,000 through her fraudulent applications. She also collaborated with others to submit similar false applications, contributing to an additional $837,716 in losses, according to the Department of Justice. Six co-defendants were charged in connection with this conspiracy under case number 24-cr-20079.
Beyond federal loan programs, Chapman also exploited local COVID-19 rental assistance initiatives run by the State of Florida and the City of Miami. Prosecutors stated that she used the stolen funds to purchase high-end goods from luxury retailers, including Louis Vuitton, Chanel, Fendi, Goyard, and Nordstrom. She also spent money on a designer teacup puppy and a $7,500 stay at a luxury resort in Key Largo.
The case was investigated by the U.S. Postal Service Office of Inspector General (USPS OIG), the SBA Office of Inspector General (SBA OIG), and the U.S. Department of Labor Office of Inspector General (DOL-OIG). It was prosecuted by Assistant U.S. Attorney Daniel Bernstein, with Assistant U.S. Attorney Gabrielle Charest-Turken overseeing asset forfeiture proceedings.
Chapman’s case is part of a broader crackdown on pandemic-related fraud orchestrated by the COVID-19 Fraud Enforcement Task Force, which the Department of Justice established in May 2021 to investigate and prosecute individuals exploiting pandemic relief programs.
The CARES Act, passed in March 2020, was designed to provide emergency financial support to individuals and businesses affected by the COVID-19 pandemic, including programs like the PPP and EIDL. Chapman’s misuse of these funds represents one of many enforcement actions arising from the federal effort to hold fraudsters accountable.
Author
