No Less Than a Fraudster | Florida | Covid-19 Fraud

Malaina Chapman was employed as a Disaster Relief Specialist for the Economic Injury Disaster loan with the Small Business Administration in Florida. The go-to person in declared disasters, Chapman was no less than a superhero for local businesses and non-profits looking to access low-interest loans and access working capital to overcome economic hardship. But when the COVID-19 pandemic came around, Chapman evolved into a fraudster, fraudulently applying for and receiving over $1 million in Paycheck Protection Program (PPP) state loans.

In February 2021, Chapman submitted multiple online loan applications in the name of Upscale Credit Lounge, LLC and DA TRAP, LLC. In support of her application, Chapman submitted false and fraudulent gross revenue reports, average monthly payrolls and false Employers Quarterly Tax Returns, which purportedly documented the wages of the companies. 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. The COVID-19 relief program provided temporary financial assistance to prevent eviction for non-payment of rent/mortgage. Could have been a problem for Chapman but seems irrelevant since she was spending her fraudulently gained proceeds 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.

On June 19, 2025, Chapman was sentenced to four and a half years in prison, and to pay $1,297,178 in restitution.

Excellent job by the Department of Labor Office in this case.

Today’s Fraud of The Day is based on article “Former SBA employee in Miami sentenced to 54 months for COVID-19 relief fraud” published by Caribbean National Weekly News on June 19, 2025.

A former Small Business Administration (SBA) employee from Miami, Malaina Chapman, 38, was sentenced on June 13 to 54 months in prison, followed by three years of supervised release, for fraudulently obtaining COVID-19 relief funds and spending them on luxury items. She was also ordered by United States District Judge Rodolfo A. Ruiz II to pay $1,297,178 in restitution.

Chapman worked as a Disaster Relief Specialist with the SBA from September 28, 2020, to March 18, 2021. During that time, she engaged in multiple schemes to defraud the Paycheck Protection Program (PPP), the Economic Injury Disaster Loan (EIDL) program, local credit unions, and state and local COVID-19 relief programs.