Seventeen New York City municipal workers – including seven from the NYPD and one MTA staffer – were busted in separate COVID-19 relief schemes that netted them over $1.5 million in federal funds, prosecutors said Wednesday.
Some of the conspirators allegedly spent the fraudulently obtained cash to gamble or on stocks, furniture and electronics, according to criminal complaints unsealed in Manhattan federal court.
The scams centered on the oft-abused US Small Business Administration’s Economic Injury Disaster Loan program meant to help those struggling during the pandemic.
In the main alleged scheme, ringleader Rodney Smith, 54, is accused of conspiring to file fraudulent applications — many claiming to be on behalf of hair and nail salons — through the SBA program in 2020. The different applications claimed similar numbers of employees and revenues, prosecutors said.
The eight applicants now charged include five employees of the NYPD, an MTA worker, a staffer with the city’s Human Resources Administration and one person who worked for a Big Apple-based nonprofit.
They netted between $52,000 and $60,000 a pop — and then paid Smith and others thousands in kickbacks, a complaint alleges. In total, Smith is suspected of being involved in 95 fraudulent applications, which investigators linked to him through one IP address tied to his Brooklyn home.
