Former SBA Employee from South Florida Headed to Federal Prison After Defrauding COVID-19 Relief Programs — Southern District of Florida

Summary

Press release of the U.S. Attorney's Office, Southern District of Florida, dated June 17, 2025. Malaina Chapman, a former Small Business Administration Disaster Relief Specialist, was sentenced on June 13 by Judge Rodolfo A. Ruiz II to 54 months in prison and three years of supervised release, and ordered to pay $1,297,178 in restitution. The release says that while employed by the SBA she took part in schemes to defraud the Paycheck Protection Program and the Economic Injury Disaster Loan program, received $230,246 on applications for herself, and conspired with others on false PPP applications involving losses of $837,716. She also obtained state and city emergency rental assistance and spent the money on luxury items.

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PRESS RELEASE


Former SBA Employee from South Florida
Headed to Federal Prison After
Defrauding COVID-19 Relief Programs
Tuesday, June 17, 2025

For Immediate Release
U.S. Attorney's Office, Southern District of Florida

MIAMI – A former Small Business Administration (SBA) employee who fraudulently
obtained COVID-19 relief money to spend on luxury items was sentenced on June 13.

United States District Judge Rodolfo A. Ruiz II sentenced Malaina Chapman, 38, to 54
months imprisonment, followed by three years of supervised release. Judge Ruiz further
ordered Chapman to pay $1,297,178 in restitution.

According to court documents and statements made in court, Chapman was employed
as a Disaster Relief Specialist with the SBA from September 28, 2020 through March 18,
2021. While employed by the SBA, Chapman became involved in multiple schemes to
defraud the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan
program, as well as local credit unions and local and state programs designed to assist
those affected by the COVID-19 pandemic.

On February 10, 2021, Chapman submitted an online loan application in the name of
Upscale Credit Lounge, LLC to a lender. In support of her application, Chapman submitted
a false and fraudulent Schedule C (Form 1040) that reported gross revenues of $103,674
and a tentative profit of $81,860 for 2020. The lender relied upon the representations in
Chapman’s application to approve a loan in the amount of $17,052.50.

On February 19, 2021, Chapman submitted an online PPP loan application with the lender
on behalf of DA TRAP, LLC. In her application, Chapman claimed that she had four
employees and an average monthly payroll of $14,191. In support of her application,
Chapman submitted a false and fraudulent Employers Quarterly Tax Return (Form 941),
which purportedly documented the wages paid by DA TRAP. Relying on the
representations in the application, the lender approved a loan in the amount of
$35,477.50.
In total, Chapman received $230,246 for the loan applications she submitted on her own
behalf.

Chapman also conspired with others to submit false and fraudulent PPP loan applications
on their behalf. Six defendants were charged under case number 24-cr-20079. For that
conspiracy, Chapman was held accountable for losses of $837,716.

In addition to defrauding the PPP program, Chapman also took advantage of the State of
Florida and the City of Miami’s COVID-19 Emergency Rental Assistance Programs.

Chapman spent the money on luxury items from Louis Vuitton, Nordstrom, Goyard,
Chanel, Fendi, as well as a designer teacup puppy. Chapman also spent over $7,500 on a
stay at a Key Largo luxury resort.

U.S. Attorney Hayden P. O’Byrne for the Southern District of Florida; Special Agent in
Charge Jonathan Ulrich, U.S. Postal Service Office of Inspector General (USPS OIG); Special
Agent in Charge Amaleka McCall-Brathwaite, U.S. Small Business Administration Office of
Inspector General (SBA OIG), Investigations Division’s Eastern Region; and Special Agent
in Charge Mathew Broadhurst of the U.S. Department of Labor Office of Inspector General
(DOL-OIG), Southeast Region, made the announcement.

This case was investigated by USPS-OIG, SBA-OIG, and DOL-OIG.

Assistant U.S. Attorney Daniel Bernstein prosecuted the case.

Assistant U.S. Attorney Gabrielle Charest-Turken is handling asset forfeiture.

In March 2020, the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was
enacted. It was designed to provide emergency financial assistance to the millions of
Americans suffering the economic effects caused by the COVID-19 pandemic. Among
other sources of relief, the CARES Act authorized and provided funding to the SBA to
provide EIDLs to eligible small businesses, including sole proprietorships and independent
contractors, experiencing substantial financial disruptions due to the COVID-19 pandemic
to allow them to meet financial obligations and operating expenses that could otherwise
have been met had the disaster not occurred. EIDL applications were submitted directly
to the SBA via the SBA’s on-line application website, and the applications were processed
and the loans funded for qualifying applicants directly by the SBA.

On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task
Force to marshal the resources of the Department of Justice in partnership with agencies
across government to enhance efforts to combat and prevent pandemic-related fraud.
The Task Force bolsters efforts to investigate and prosecute the most culpable domestic
and international criminal actors and assists agencies tasked with administering relief
programs to prevent fraud by, among other methods, augmenting and incorporating
existing coordination mechanisms, identifying resources and techniques to uncover
fraudulent actors and their schemes, and sharing and harnessing information and insights
gained from prior enforcement efforts. For more information on the Department’s
response to the pandemic, please visit https://www.justice.gov/coronavirus.

On September 15, 2022, the Attorney General selected the Southern District of Florida’s
U.S. Attorney’s Office to head one of three national COVID-19 Fraud Strike Force Teams.
The Department of Justice established the Strike Force to enhance existing efforts to
combat and prevent COVID-19 related financial fraud. For more information on the
department’s response to the pandemic, please click here.

Related court documents and information may be found on the website of the District
Court     for    the    Southern    District   of Florida   at www.flsd.uscourts.gov or
at http://pacer.flsd.uscourts.gov, under case number 24-cr-20321.

                                          ###

Contact
Public Affairs Unit

U.S. Attorney’s Office

Southern District of Florida

USAFLS.News@usdoj.gov

Updated June 17, 2025

Topics
CORONAVIRUS

DISASTER FRAUD
Component
USAO - Florida, Southern


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