Chicago City Wire

The Inspector General of Chicago Public Schools has reported that 14 employees were involved in fraudulent activities related to the Paycheck Protection Program (PPP) loans, as per an annual report. The investigation was conducted by cross-referencing the names of CPS employees with those who had received PPP loans.

The probe revealed that over 810 full-time CPS employees were recipients of PPP loans. Notably, some CPS employees, who are mandated to reside within city limits, had obtained these loans using suburban addresses. Consequently, the inspector general has suggested that CPS mandate prospective employees to disclose if they have received PPP loans prior to their employment.

"PPP fraud is a serious crime, and the OIG is engaged in ongoing discussions with law enforcement agencies regarding the OIG’s PPP matters," according to the 2023 annual report.

The report made reference to at least nine unnamed CPS school and central office administrators, a school manager, teacher and a technology employee.

Findings from the inspector general's report included:

• A Central Office administrator with an annual salary of more than $200,000 admitted to making false statements claiming to have earned $75,000 as a sole proprietor outside their CPS job to obtain $15,000 in PPP loans. The employee resigned and was placed on the school district's Do Not Hire list.
• A CPS administrator who had a $120,000 salary obtained $20,000 in PPP loans by stating they falsely earned nearly $100,000 as a sole proprietor in 2019. "The administrator’s false statements and fraud were particularly egregious because the employee’s role at CPS involved monitoring CPS’ use of public funds," the report said. The CPS employee was fired and placed on the Do Not Hire list.
• A regional administrator with a $165,000 salary created a fake business to receive a $20,000 PPP loan. "Records showed that the administrator received the PPP funds in their personal checking account and spent the funds within two months of receiving them, largely on a personal trip to Las Vegas and expensive luxury items. Like most PPP loans, the administrator’s loan was entirely forgiven," according to the report. The inspector general recommended the employee be fired and placed on the Do Not Hire list.
• A CPS tech employee fraudulently received a $20,000 PPP loan by making false claims. The employee was fired and placed on the Do Not Hire list.
• A school administrator fraudulently received a $20,000 PPP loan by falsely claiming over $100,000 in self-employment income that did not exist. The school board has started termination hearings, which are pending.
• A school administrator with an annual salary of $140,000 fraudulently obtained $20,000 in PPP loans. The employee resigned and was placed on the Do Not Hire list.
• A school administrator falsely claimed more than $100,000 in self-employment income to obtain a $20,000 PPP Loan. The administrator, who had an annual salary of more than $100,000, was fired and placed on the Do Not Hire list.
• A school administrator with a $120,000 salary falsely reported $120,000 in self-employment income to obtain a $20,000 PPP loan. The administrator resigned and was placed on the Do Not Hire list.
• A school administrator obtained two PPP loans worth more than $40,000 by claiming they earned nearly $100,000 in self-employment income in 2019. The administrator, who had a $120,000 CPS salary, was fired and placed on the Do Not Hire list.
• A school administrator fraudulently obtained a $20,000 PPP loan by claiming more than $100,000 in self-employment income in 2020. The administrator, who had a CPS salary of more than $120,000, resigned and was placed on the Do Not Hire list.
• A teacher fraudulently obtained a PPP loan of more than $20,000 by inflating their self-employment income in 2020. The teacher had an annual salary of $110,000. The Board of Education has started dismissal proceedings, which are pending.
• A school support staff employee falsely reported earning $100,000 as a barber in 2019 to obtain more than $20,000 in PPP loans. The employee, who had a salary of $76,000, resigned and was placed on the Do Not Hire list.
• A school administrator fraudulently obtained a $17,000 PPP loan by claiming $80,000 from a side business. The inspector general recommended termination, which his being considered by the board of education.
• A school administrator who was being investigated for violating CPS residency policy and time fraud received a fraudulent PPP loan by claiming to have made $60,000 from a construction business located at a suburban home. The investigation found the business was fictitious. The administrator resigned and was placed on the Do Not Hire list.

In addition to the PPP fraud report, the Office of Inspector General (OIG) disclosed that an assistant principal faced a 17-count indictment from a Cook County grand jury on July 3. She is accused of embezzling more than $195,000 in school funds over two years through methods such as issuing fraudulent checks to herself and family members. The total amount alleged to have been stolen is $273,364, which includes funds recovered by the OIG during its investigation, according to a press release.