EXTRA CHEESE: Fake Farm Fraud, The Paycheck Protection Program & Secondary Lactose Intolerance

Today’s story came out within the last 2 weeks, but it’s  too scandalous not to cover. My main source is an article by Derek Willis & Lydia DePillis in The Counter titled “Hundreds of PPP loans went to fake farms in absurd places”.

So, as we all know, this pandemic era has been challenging for many individuals and businesses. In the US, there is a loan program called the Paycheck Protection Program (or PPP for short) - and it was designed to support small businesses and their employees by financing payroll costs. It was signed into law in March 2020 as a part of the CARES Act, with $349 billion dollars in funding. Eligible businesses could get 2.5x’s the amount of their payroll costs, or 3.5x’s the amount of these costs in the case of food or accommodation industries; up to a maximum of 2 million dollars (Willis & DePillis, 2021; Yin, 2021). So food industries may qualify for more money, which is important to note here. Does that make sense so far? I know it’s a lot of numbers.

With the processing and distribution of these loans, traditional banks would prioritize their clients. So they had the clients’ financial history and could make informed decisions with whom to lend to. But this left many small businesses or those with less than perfect credit scores without the same opportunity, so they started turning to a collection of online lenders that offered short-term loans to businesses. One online lending platform based in Atlanta, which is called Kabbage (with a K), processed and distributed just under 300,000 loans or the equivalent of 7 billion dollars before August 2020 - which is when the initial round of funding ran out. So this is a great initiative, but as with many rapid program roll-outs during the pandemic, it was prone to some bumps in the road; and in the case of Kabbage, very little human review was involved.

Reason being - the company received 5% of each loan given, and they were being encouraged to distribute them quickly for the sake of these small businesses. So it was in Kabbage’s best interest to dish these loans out as quickly as possible. With the increased volume, Kabbage started to bring in employees who had previously been laid-off, and would incentivize them with gift cards when they would hit certain loan application milestones. It is estimated that Kabbage made hundreds of millions of dollars of total revenue during this time.

Kabbage would essentially lend the money to businesses with poorer credit histories in exchange for steeper fees. But THESE included a number of fraudulent agricultural businesses. It was brought to the attention of authorities that at least 378 loans totaling $7 million dollars were distributed to what were thought to be single-person operations. And most of them were categorized as farms. 

Ritter Wheat Club, a quote unquote “wheat farm” and Deely Nuts, which was labeling a tree nut farm, both received loans over $20,000. Other farms titled things like “Beefy King” and “Tomato Cramber” received slightly smaller loans, but all fraudulent. Some of the locations and matching food products made very little sense - for instance there was a potato field in Palm Beach, and an orange grove in Minnesota. It’s estimated that 75% of the loan applications that went through Kabbage were processed without any human review, which likely would have stopped this type of fraud sooner.

Many of these farms followed a pretty consistent naming convention - they would use the name of a resident at an address where a business is registered, then add an agricultural term. One resident of one of the non-existing businesses claimed that the company who does their accounting fell victim to a ransomware attack in March of last year (2020). Social security numbers and some financial information were taken during this attack. They call this “synthetic identity theft”, when a criminal uses some legitimate personal information as well as fake information to build a credit profile. So the bank accounts set up by the criminal then funnel any money back to them rather than the owner of the information.

Unfortunately, this type of fraud can impact the credit, insurance and future background checks of the victims involved. And it is a situation that authorities are still trying to figure out. 

Currently hundreds of individuals have been formally accused of gaming pandemic response programs, with some using phantom farms to do so.

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OK. Now onto our listener story for the week. This one is from our fellow Master’s colleague and friend Georgia. Let’s hear what she has to say…

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Georgia, thanks so much for sharing your story. I’m really sorry you had to go through all of that. 

But it does sound like your doctor was pretty bang on with this one. A staph or staphylococcus aureus infection can lead to lactose intolerance in some cases. The staphylococcus bacteria is anaerobic, meaning it can live without oxygen, and it therefore thrives within a food product, moreso than when it’s on the surface of one. Since it is a bacteria, it does not need a host to survive. And we talk a lot more about the different types of bacteria in our food poisoning episode, so go listen to that if you haven’t already.

The weird thing about staph is that about 25% of all people and animals have it on their skin or within their nose. It doesn’t normally cause illness this way (so if I had it and licked my hand it’s very unlikely that I would get sick); but when it’s in food, it often starts producing toxins, which are what cause food poisoning in humans (CDC, 2018). The bacteria is usually killed when food is heated to its proper internal temperature, but the toxin will live on. And it is most often found in sandwiches, dairy products, meat, and things like mayonnaise-based salads. So mainly things that are handled and mixed.

The onset of a staph infection starts after about 30 minutes, which aligns almost perfectly with Georgia’s 45 minute onset. Nausea, vomiting and stomach cramps are the main symptoms, and it’s actually pretty rare for these symptoms to last beyond 24 hours (CDC, 2018). So Georgia is one of the lucky ones.
But when symptoms do persist, damage to the intestinal lining may occur. And this may lead to a reduction in lactase production, which is a chemical or enzyme that’s needed to break down lactose, which is found in milk. Without the ability to digest lactose, you might experience bloating, pain and diarrhea after consuming dairy. This type of lactose intolerance is called secondary or acquired lactose intolerance, and it typically goes away after the intestinal lining heals itself (Knott, 2020). 

In terms of how long this should take, I found pretty inconsistent results. But what I did find interesting, is that it can take individuals with celiac disease up to two years for their intestines to recover after cutting out gluten. And this means that the little villi that absorb things take about two years to get back to their normal function (John Hopkins Medicine, n.d.). So it’s interesting that it took Georgia about 2 years to also recover.

All in all, it does sound like this is a pretty textbook staph infection. And the only question that remains now is whether Georgia can still eat mayo.