Western District of Washington joins DOJ Fraud Division, SBA and SBA-OIG in Surge Takedown exceeding $245 million in COVID-era Loan Fraud

Press release — Western District of Washington joins DOJ Fraud Division, SBA and SBA-OIG in Surge Takedown exceeding $245 million in COVID-era Loan Fraud, dated 2026-09-14, issued by U.S. Attorney’s Office, Western District of Washington.

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Seattle –The Western District of Washington today announced the plea and sentencing in two cases as part of a nationwide enforcement action led by the Justice Department’s National Fraud Enforcement Division, the Small Business Administration, and the SBA Office of Inspector General targeting fraud in the SBA’s Paycheck Protection Program (PPP). The Western District of Washington was a key participant in this surge effort. From June 12 to September 1, federal prosecutors across the country facilitated fraud enforcement actions spanning over 160 criminal defendants, including approximately 80 newly charged defendants, reaching approximately $245 million dollars in intended loss to American taxpayers. “Every dollar that went to fraud is a dollar that was not available to help our small businesses who struggled to stay afloat during the pandemic,” said First Assistant U.S. Attorney Charles Neil Floyd. “Our office will prioritize holding fraudsters accountable for the harm they cause in our communities.” “Pandemic loan relief was meant to keep American small businesses alive during government lockdowns—not line the pockets of fraudsters,” said Attorney General Todd Blanche. “The defendants charged during our summer surge allegedly fabricated businesses, submitted false payroll and revenue claims, stole identities, and concealed foreign ties on their applications— but they will now be prosecuted to the fullest extent of the law.” “This summer surge shows what is possible when dedicated public servants across the country work together with a single purpose,” said Assistant Attorney General Colin M. McDonald of the National Fraud Enforcement Division. “Our mission is clear: protect taxpayer funds, safeguard the integrity of federal relief programs, and deliver justice to those who exploited them. We will remain steadfast every day—standing shoulder-to-shoulder with our partners—to identify fraud, pursue those responsible, and restore confidence in the programs meant to help American small businesses thrive.” “Today’s announcement represents the largest-ever action against perpetrators of SBA fraud, with 870,000 suspended borrowers tied to $39 billion in suspected fraudulent PPP and COVID EIDL activity. In partnership with Vice President Vance and the White House Task Force to Eliminate Fraud, we’re putting fraudsters on notice: the federal government will no longer turn a blind eye to those who stole from taxpayers and exploited programs designed to sustain small businesses during the pandemic,” said SBA Administrator Kelly Loeffler. “With demand letters going out to suspected fraudsters, we’re also sending a clear message that they must repay their debts or face Treasury collections and possible federal law enforcement. Under this Administration, the free ride is over. We are restoring accountability, recovering taxpayer dollars, and protecting SBA programs for the legitimate small businesses they were created to serve.” “Operation No Doze brings a focused and coordinated approach to pursuing fraud in SBA’s pandemic relief programs,” said SBA Inspector General William Kirk. “By concentrating our investigative resources and working closely with SBA and our law enforcement partners, we are strengthening our ability to identify fraud, recover taxpayer funds, and hold accountable those who exploited programs created to help small businesses in a time of extraordinary need. This initiative makes clear that the passage of time does not diminish our commitment to accountability.” In the Western District of Washington First Assistant U.S. Attorney Charles Neil Floyd highlighted that two defendants pleaded guilty to PPP-related fraud involving approximately $1.3 million in alleged losses. In July, Rahim Kassamali was sentenced to a year and a day in prison for fraudulently obtaining nearly $1.2 million in PPP and Economic Injury Disaster Loans for four companies. Kassamali created fake tax documents and submitted a dozen false loan applications. He paid no payroll but instead used the money for stock purchases and living expenses. Tyler Lee Berens pleaded guilty in July to fraudulently applying for Pandemic Unemployment Assistance benefits in 19 states and collecting $148,206. Berens also applied for $17,500 in a PPP loan but was not successful in this fraud. He is scheduled for sentencing October 5, 2026. The Kassamali case was investigated by the FBI and was prosecuted by Assistant United States Attorney Grace Zoller. The Berens case was investigated by the FBI, the Social Security Administration Office of Inspector General (SSA-OIG) and the U.S. Department of Labor Office of Inspector General (DOL-OIG). The case is being prosecuted by Special Assistant U.S. Attorney Jessica M. Ly. Ms. Ly is an attorney with the Social Security Administration specially designated to prosecute fraud cases in federal court. On April 7, the Department of Justice announced the creation of the National Fraud Enforcement Division (“Fraud Division”). The Fraud Division is laser-focused on investigating and prosecuting those who commit fraud against the American people. The Department’s work to combat fraud supports President Trump’s Task Force to Eliminate Fraud, a whole-of-government effort chaired by Vice President J.D. Vance to eliminate fraud, waste, and abuse within Federal benefit programs.

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