On February 10, 2026, a federal court made headlines by sentencing Joshua White to 96 months in prison for orchestrating a fraudulent scheme that exploited federal financial relief programs designed to support small businesses during the COVID-19 pandemic. This case highlights not only the risks of fraud but also serves as a cautionary tale for small business owners navigating the ever-evolving landscape of federal assistance.
White’s sentencing marks the conclusion of a multi-year investigation into a conspiracy that resulted in the misappropriation of over $11.5 million from the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) program. United States Attorney for the Middle District of Pennsylvania, Brian D. Miller, noted that White was the fourth defendant sentenced in this significant case. His father, Creed White, was previously given a ten-year sentence, along with three others implicated in the scheme.
The fraudulent activities began shortly after the onset of the pandemic when Creed White, owner of Aluminum Alloys Manufacturing, submitted approximately 120 fraudulent applications for PPP and EIDL loans. Most of these applications were linked to dormant businesses that had no actual operations. He used the proceeds from these loans not for legitimate business expenses but for personal enrichment, ultimately undermining the very purpose of these relief programs.
As these developments unfold, it’s critical for small business owners to understand the implications of this case. The federal government has established stringent measures to safeguard against fraudulent activities and will aggressively pursue those who attempt to exploit support systems.
“Individuals deliberately and repeatedly defrauded the PPP and EIDL programs, which were designed to help small business owners during the COVID pandemic,” said Yury Kruty, Special Agent in Charge of the IRS-Criminal Investigations Philadelphia Field Office. This sentiment echoes the broader commitment to enforcing the laws governing federal assistance, emphasizing the vigilant oversight by agencies like the IRS and the Small Business Administration (SBA).
The stakes are high for small business owners applying for federal relief. Understanding the requirements and ensuring compliance is essential. During a time when many businesses are still recovering from pandemic-induced financial stress, the challenge lies in securing legitimate funding while avoiding any potential pitfalls. The fraudulent actions of a few individuals have led to more robust scrutiny of the application processes, potentially impacting the speed at which funds are disbursed to legitimate businesses.
In a related statement, Amaleka McCall-Brathwaite, Special Agent in Charge of the SBA Office of Inspector General, remarked, “When individuals manipulate pandemic relief programs for personal gain, they undermine public trust and divert critical resources from legitimate small businesses.” Her comments highlight the importance of accountability in federal programs designed to stimulate economic recovery.
The repercussions of this case extend beyond legal penalties. Small business owners must remain alert to the evolving regulatory landscape as enhanced measures are developed to protect taxpayer dollars. This case is a reminder that while the federal assistance programs provide critical support, they are also heavily monitored to ensure that aid reaches those who need it the most.
Moreover, the case underscores the increasing collaboration between law enforcement agencies to detect and prosecute fraud. Loren Sciurba, Deputy Inspector General of the Department of the Treasury, emphasized the government’s unwavering commitment to combating fraud in these programs, saying, “We remain committed to protecting the taxpayer through detection, investigation, and prosecution of such frauds.”
For small business owners, particularly those who might find themselves in complex financial situations, understanding the potential ramifications of misusing federal funds is essential. As the government continues to tighten oversight, the lessons drawn from this high-profile case serve as a crucial guide for navigating the often challenging waters of federal assistance.
For detailed insights into this investigation, you can access the original announcement here. Small business owners are encouraged to remain informed about these developments to ensure their compliance with federal regulations and to safeguard their businesses against any fraudulent activities that could jeopardize their future.
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