U.S. Official Convicted in $13M PPP and IRS Fraud Scheme Involving Fake Businesses

A U.S. government official has been convicted for orchestrating a $13 million fraud through the Paycheck Protection Program (PPP) and the Internal Revenue Service (IRS) refund system. Carl Delano Torjagbo, also known as Karl Lucius Delano, was found guilty in July 2025 for submitting false loan applications and claiming fraudulent tax refunds under fabricated business identities [1]. The scheme involved creating multiple fake small businesses, none of which actually existed, to siphon funds from government relief programs designed to support legitimate enterprises during the pandemic [1].

Torjagbo’s strategy relied on presenting himself as a high-net-worth individual capable of investing in numerous ventures. He leveraged this fabricated image to bypass standard verification procedures and secure multiple PPP loans [1]. Alongside these fraudulent loan applications, he submitted falsified IRS documents to claim additional refunds, compounding the overall financial loss [1]. The case underscores the ease with which identity fraud can be used to exploit large-scale financial programs, particularly when verification mechanisms are insufficient or loosely enforced [1].

This is not an isolated incident; the PPP has been a repeated target for fraud, with numerous cases emerging since its inception. The program’s design—intended to provide rapid relief to small businesses—lacked robust oversight mechanisms, making it vulnerable to abuse [1]. While the government has recovered approximately $1.97 million, the remainder remains difficult to trace due to the dispersed nature of the fraud and the use of intermediary shell companies [1].

Federal authorities have emphasized their commitment to pursuing and prosecuting individuals engaged in financial misconduct. The conviction of Torjagbo reflects a broader initiative to recover misused public funds and hold offenders accountable [1]. However, the case also highlights the need for stronger regulatory frameworks and enhanced monitoring systems to prevent similar frauds in the future [1].

The outcome has prompted renewed calls for improved identity verification and stricter enforcement in federal financial assistance programs. While the PPP was established to provide critical support during a national crisis, its execution has exposed significant weaknesses in oversight and compliance [1]. As agencies continue to investigate and recover lost funds, the broader implications for government financial security remain a pressing concern [1].

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[1] title: US Government Scammed out of $13,000,000 by Fake Millionaire Who Filed Fraudulent PPP Loans and IRS Refunds. (https://dailyhodl.com/2025/08/04/us-government-scammed-out-of-13000000-by-fake-millionaire-who-filed-fraudulent-ppp-loans-and-irs-refunds/)