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An East Coast bank employee attempted to defraud the federal government’s Payment Protection Program by applying for a loan for a shell company that he falsely claimed was a small business, federal investigators said Monday.

Another suspected fraudster, this one based in the U.S. South, sought $4 million in federal loans under the PPP while claiming to work as an oil consultant who had recently hired 250 employees and paid them entirely in cash out of a distrust of banks, investigators said.

Those examples of suspected crimes were among several that FBI officials cited Monday during an online discussion of fraud typologies that have emerged during the coronavirus pandemic, which has brought a spike of false marketing, price gouging, investment solicitations and other schemes.

“We primarily see reports of price gouging through suspicious activity reports,” said an agent with the FBI, which now has hundreds of open investigations into various crimes related to COVID-19. “This is something that is being prioritized by federal authorities as well as state authorities.”

Other cases involve the Payment Protection Program, or PPP, through which small businesses can apply for federal loans that effectively become grants if they use the funds to cover payroll costs.

More than 4 million businesses have applied for federal relief in the two months since the PPP’s establishment, and “a dramatic increase in fraud” has followed, an FBI investigator in Washington, D.C., said Monday, adding that the most common fraud thus far involves overstating employee headcounts to qualify for larger dsibursements.

On May 5, federal prosecutors accused two Rhode Island men of claiming to employ dozens of people at three restaurants in applying for $540,000 in PPP loans when the underlying businesses were either shuttered prior to the pandemic or had few if any connections to the suspects.

The FBI was alerted to the alleged fraud by a compliance officer at BankNewport, who drove by one of the restaurants as part of an enhanced due-diligence review and observed that it appeared to have been closed for several months, ACAMS moneylaundering.com reported. An FBI agent later posed as a compliance officer for the bank in phone calls with one of suspects.

Whether compliance officers similarly drew the FBI’s attention to the East Coast banker is unclear, but an FBI agent said the bureau’s investigation was triggered by “internal reporting from the bank.” The loan was ultimately approved.

In a second example of a recent fraud described Monday, an East Coast man already convicted and paroled for money laundering set up two purported companies last month and used fraudulent payroll documents to file for loan relief, ultimately receiving close to $200,000 that he mostly withdrew within five days in cash from ATMs and bank visits.

Some fraudsters have used multiple companies, fraudulent tax documents and expired or backdated paperwork to make their businesses eligible for the PPP, a federal agent said Monday. Others have used as many as 10 companies that shared the same address.

The FBI has also observed fraudsters using purported medical companies to file for loans on the belief that compliance officers and others will view the industry with less suspicion during a health crisis.

Others have opened accounts at community banks amid the growing stack of applications at major lenders, then immediately transferred loan funds to their accounts at large banks.

“Legitimate companies are getting denied loans because fraudsters are using stolen information,” the FBI agent in Washington, D.C., said.

Contact Daniel Bethencourt at dbethencourt@acams.org