Illinois State Police officers charged with PPP loan fraud

Two Chicago-area Illinois State Police troopers are suspected of defrauding the federal Paycheck Protection Program, which provided loans to businesses struggling during the COVID-19 pandemic.

In their loan applications, one said he ran a sports program for children and listed “babysitting” as the primary purpose of his business. The other said he was a “craftsman.”

The agency has filed complaints against the officers with the Illinois State Police Merit Board, which decides disciplinary action.

State police provided the complaints to the Chicago Sun-Times through a Freedom of Information request, but declined a request for other documents, including personnel records and outside employment disclosures.

The agency said the denial was based on an “active criminal investigation.”

“The agency expects to conduct criminal interviews as part of this investigation. “Releasing further information at this time could jeopardize the integrity of the ISP investigation,” the agency said in a letter.

The letter did not mention the Sun-Times’ request for documents involving a third officer, a former district commander who, according to public records, also appears to have received a PPP loan.

When asked this Friday, a spokesman for the state police replied: “ISP does not carry out administrative proceedings against pensioners” and does not comment on ongoing investigations.

The federal PPP program run by the Small Business Administration was, by the government’s own estimates, rife with fraud involving at least $200 billion in ill-gotten loans. The loans were forgivable, so they often didn’t have to be repaid.

Hundreds if not thousands of local public employees, including Chicago police officers, firefighters, teachers and others, are suspected of defrauding the program, according to investigations by the inspectors general who oversee those agencies. Some were fired, but few were charged with crimes.

Even people incarcerated in prisons and jails took part in the act.

The allegations against the two state troopers are particularly significant because the agency is considered the gold standard of police work.

In the Chicago area, suburban police departments turn to the State Police to conduct independent investigations into police-involved shootings involving their departments. State police could also fill that role for the Chicago Police Department.

The complaints against the officers — whom the Sun-Times is not naming because they were not punished or criminally charged — say they were interviewed by the Illinois inspector general’s office.

One admitted lying on an application for a PPP loan, according to the complaint filed against him with the Merit Board. The Master Trooper, who lives in Kendall County, has been with the State Police since 2006. He could not be reached for comment.

On March 29, 2021, he submitted an application for a PPP loan, indicating he was an independent contractor. He received a $17,707 loan that was later forgiven.

His PPP application listed “babysitting” as his primary business with gross income of $85,000 in 2020. He said his expenses included $30,000 for contract work, $20,000 for advertising, the same amount for a car and truck, $10,000 for an office and $5,000 for repairs.

The senior police officer said in his interview with the Inspector General’s Office that he ran a sports camp for children from November 2020 to around November 2021. He said he took them to a park to exercise them and give them snacks.

He said he believed the PPP program was intended to provide startup capital for existing businesses that were struggling during the pandemic — even though it was actually intended to cover payroll costs, rehire laid-off workers and cover overhead costs.

However, during the interview, he admitted that the $85,000 in income he reported came from his state police job and not from his side business. He said the expenses he reported were false, according to the complaint filed with the Merit Board.

The other officer – a special agent or detective assigned to the Chicago District – lives in DuPage County and has been with the state police since 2018. He declined to comment.

In his loan application dated March 8, 2021, he said he was a “trade tradesman” who earned $100,000 in gross receipts in 2020. He received a $20,832 loan, which was also forgiven.

In an interview with the inspector general’s office, he said the $100,000 in gross receipts he reported included his salary from the state police.

But if his 2020 State Police salary were deducted from that $100,000 amount, that would leave just $1,500 in income from his handyman business, according to the complaint filed with the Merit Board.

That would be far less than the money the company would have had to raise to qualify for a loan.

According to the complaint, the special agent told the Office of the Inspector General that he used his PPP loan to furnish his home and repair properties owned by him and his relatives.