A person filling application form. Apply for the Paycheck Protection Program with an eligible lender

Fourteen Chicago Public Schools employees — 13 of whom had six-figure salaries — have lost or are in the process of losing their jobs because of fraudulent participation in the federal Payroll Protection Program, according to CPS’ inspector general.

The employees each used falsified loan applications to receive up to $21,000 in PPP loans, according to the Office of the Inspector General for CPS.

Twelve of the individuals have either resigned or been terminated, according to the OIG, with the remaining two in termination proceedings.

The OIG’s review has identified hundreds of potentially fraudulent PPP loans in CPS, according to the inspector general.

“Pandemic relief fraud by CPS employees causes significant reputation harm to CPS and diminishes trust in the school district,” the OIG’s report said. “This is especially true when the perpetrators are employees responsible for managing public funds.

“The OIG’s review and investigation have highlighted the needs for CPS to institute measures in the hiring process to determine whether prospective employees may have fraudulently obtained pandemic relief funding and to raise awareness about the longstanding requirements for CPS employees to disclose and receive approval for any secondary employment.”

The PPP was established in 2020 to support small businesses and other eligible entities impacted by COVID-19 with the goal of keeping workers employed. Between March 2020 and May 2021, the PPP guaranteed more than 11.4 million forgivable loans totaling nearly $800 billion in value.

However, the PPP experienced “unprecedented fraud levels” the Small Business Administration inspector general stated in a 2022 report.

In recent months, inspectors general have issued public reports regarding pandemic relief fraud by employees of the Cook County Circuit Court, Chicago Housing Authority, Chicago Park District and other government entities.

OIG data revealed that more than 780 full-time CPS employees received PPP loans.

The 14 found to have fraudulently obtained PPP loans were primarily in leadership and central administration roles, with salaries of more than $100,000, according to OIG.

According to OIG information: a CPS school administrator earning more than $140,000, falsely claimed on a PPP loan application to have earned more than $100,000 in 2019 alone by working as a chef. After admitting to never working as a chef, the administrator resigned.

Other fraudulent loans given to CPS employees, according to the inspector general, were:

• A Central Office administrator, making more than $200,000, obtained a PPP loan of more than $15,000, claiming the individual had earned $75,000 as a sole proprietor in 2020. The individual resigned.
• A CPS administrator, whose role was to monitor CPS’ use of public funds, obtained a forgivable PPP loan of $20,000 by stating the individual had earned nearly $100,000 in net income as a sole proprietor in 2019. The individual had a salary of more than $120,000. The administrator was terminated.
• A former regional administrator, earning more than $165,000, obtained a PPP loan of more than $20,000 by falsely stating that the individual had $100,000 in annual income from a business, when, in fact, neither the business nor the income existed. Evidence showed the administrator spent much of the PPP funding on luxury items as well as a trip to Las Vegas. The administrator resigned.
• A high school administrative employee, with an annual salary of more than $110,000, obtained a $20,000 forgivable PPP loan claiming the individual earned self-employment income of more than $100,000 in 2020. The individual overstated self-employment income on the PPP loan while simultaneously understating self-employment income on 2019 and 2020 tax returns, according to the inspector general. The administrator resigned during termination proceedings.
• A CPS tech employee, earning more than $110,000, obtained a PPP loan of more than $20,000 by claiming earnings of more than $125,000 in self-employment income. The individual was terminated.
• A school administrator, with an annual salary of more than $160,000, obtained a PPP loan for $20,000 claiming that the individual had more than $100,000 in self-employment income in 2020. Dismissal charges are pending against the individual.
• A school administrator, making more than $100,000, obtained a PPP loan of more than $20,000, claiming the individual had more than $100,000 in self-employment income. The administrator claimed identity theft and that the loan was never received. When shown bank records of the loan proceeds, the individual acknowledged receiving the loan. The administrator was terminated.
• A school administrator, with an annual salary of more than $120,000, obtained a forgivable PPP loan of more than $20,000, claiming more than $120,000 in self-employment income in 2019. The individual claimed their accountant completed the PPP loan application. The accountant told the OIG that she only advised the individual on how to go about completing the application. The administrator resigned on the day the individual was scheduled to have a second interview with the Office of the Inspector General.
• A school administrator, earning more than $120,000 annually, obtained two PPP loans totaling more than $40,000 by claiming nearly $100,000 in self-employment income in 2019. The individual has a business selling clothes but did not make more than $7,500 annually from it. The administrator was terminated.
• A school administrator, earning nearly $130,000 annually, obtained a forgivable PPP loan of more than $20,000, claiming nearly $100,000 in self-employment income in 2019. The employee resigned during termination proceedings.
• A school administrator, with an annual salary of more than $120,000, obtained a PPP loan of more than $20,000 by claiming more than $100,000 in self-employment income in 2020. The employee resigned.
• A teacher, earning more than $110,000, obtained a loan of more than $20,000 by inflating self-employment income, claiming earnings of more than $100,000 in 2020. The individual said that while doing some tutoring work, it had never generated anywhere near $100,000. Dismissal proceedings are pending.
• A school support employee, with a salary of nearly $76,000, obtained a loan of more than $20,000, claiming earnings of more than $100,000 as a barber in 2019. The employee resigned during termination proceedings.

“PPP fraud and other pandemic relief fraud are serious crimes,” the OIG report stated. “The OIG is engaged in ongoing discussions with law enforcement agencies regarding the OIG’s PPP matters.”