State records show Illinois sent $1.1 million in Coronavirus relief funds to “dissolved” companies

Target 3

SPRINGFIELD, Ill. (NEXSTAR) — A review of state records shows the Department of Commerce and Economic Opportunity sent at least $1.1 million in Business Interruption Grants to 72 companies the state considers “dissolved.”

In order to qualify for the Coronavirus relief funding, state application forms show the businesses had to attest that they were open on March 1st, 2020, they would try to stay open all year, and would use the money “exclusively for costs and losses incurred due to the business interruption” caused by Covid-19.

Business registration records kept at the Secretary of State’s office showed at least 72 of the companies that won grant funding were considered dissolved or terminated long before the pandemic began.

Terrence McConville, a senior attorney for the Secretary of State and the Department of Business Services, said that means those companies are “at least five months late in filing” their annual reports with the state, or they’re “out of business,” or “it could be fraud.”

Five of them dissolved in the 1990s. One of them dissolved in 1987.

Several of the companies the state considers dissolved do show an active presence on social media, an indication that they could still be conducting business while their paperwork is out of order.

“Right now, if they are dissolved, they do not have authority to practice business in the state,” McConville said in a phone call Wednesday afternoon.

The Illinois Department of Revenue found as many as 17 of those 72 still have active accounts open with the state, another sign the entities are collecting sales taxes or withholding income taxes.

However, the tax agency confirmed it had no records of 19 of the companies who won grants, and 33 others had closed their doors.

“If they got a business interruption grant, then that’s fraud, out-and-out,” McConville explained.

Lauren Huffman, a spokeswoman with DCEO, said any company that won grant money that is later found to be in “violation of their agreement will put their grant status in jeopardy and could result in the state pursuing a return of funds.”

“Even with the program now closed, DCEO continues to review compliance matters brought to our attention and has taken steps to address non-compliance that we discover, including clawing back funds in some cases,” she said.

State senator Jason Barickman (R-Bloomington) called the lapse in “due diligence” a “red flag” that shows “there’s some dysfunction” in the Pritzker administration.

“These are public funds, and the public expects the government to be prudent about how they’re used,” he said. “When the government does this, when they rush to put money out into the community and around the state, sometimes mistakes happen.”

The state is no longer accepting applications for BIG funds after running out of two rounds of funding from the CARES Act. However, more small business relief could come through the state soon after Congress approved President Biden’s ‘American Rescue Plan.’

“DCEO has closed the latest round of BIG grants with the hope that federal support will allow it to re-open applications,” Governor J.B. Pritzker said in a December 18th press conference.

State senator Sara Feigenholtz (D-Chicago) said “none of these grant programs are perfect.”

“Had the federal government been a little bit more proactive and helpful in a more timely fashion, the State of Illinois wouldn’t be struggling with all of this,” she said Wednesday afternoon. “I am not going to lay blame on DCEO for this, or the governor. I’m just not. I mean, I think everybody did the best they could. And do we need to revisit how we do the next round with some of the money coming our way? We will, and try and correct those mistakes, and maybe recover some of the money that was fraudulently taken.”

“Since its launch, the program directed nearly 9,000 grants to small businesses in every corner of the state – with an emphasis on businesses in some of the hardest hit industries and geographies,” Huffman said.

The Business Interruption Grant program distributed a total of $275 million in grant funding. Our investigation reviewed roughly 4,000 of the recipients.

Editor’s Note: This article has been updated to include the total number of grants that were awarded statewide.

Copyright 2021 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.