Congress has cut federal funding for public media — a $3.4 million loss for LAist. We count on readers like you to protect our nonprofit newsroom. Become a monthly member and sustain local journalism.
Morning Brief: As Small Businesses Struggled, Scammers Tried To Cash In
Photo by David Knox on Unsplash
()
Good morning, L.A.
As many small businesses and restaurants throughout L.A. were either not receiving help from federal loans or wondering if they would have to shut down for good, one Santa Clarita man was taking advantage of the pandemic as a way to cash in.
Raymond Magana, 40, pled guilty to fraudulently submitting applications for federal Paycheck Protection Program loans for nearly $1 million. Magana claimed to have 40 employees when in fact he had none, and cited a single-family home as his office building.
His actions are reprehensible, but they’re made much more so by the fact that real small business owners were losing their livelihoods at the same time that Magana, and others like him, were trying to cash in.
Support for LAist comes from
Federal lawmakers announced their plan to issue PPP loans almost immediately after the U.S. began shutting down because of the coronavirus. Of the fed’s initial $2 trillion stimulus package, $349 billion was earmarked for small businesses.
But within days, many entrepreneurs realized that the program was a bureaucratic nightmare; some never heard back from banks about their applications, others were rejected without being given a reason, and still more simply missed tight application windows during which banks met their loan caps almost immediately.
Meanwhile, in L.A., loans were disproportionately approved in wealthier, whiter, Westside communities than lower-income communities of color. Plus, a large portion of the money earmarked for small businesses was in fact doled out to multi-million dollar chains, including Shake Shack, Ruth’s Hospitality Group, Inc. (the parent company of Ruth’s Chris Steak House), and Kura Sushi USA.
Some of those companies returned their loans eventually, but the federal program was out of money two weeks after launching.
Many small businesses have closed down after not receiving loans, and others have had to rethink their business strategy altogether.
Magana faces 30 years in federal prison.
Keep reading for more on what’s happening in L.A. today, and stay safe out there.
Support for LAist comes from
What Else You Need To Know Today
- Officials admonished Southern California Edison for too often shutting down power to prevent wildfires, when it’s supposed to be a last resort.
- L.A. County plans to open 11 school sites as vaccination centers for teachers, school staff, and eligible older adults.
- Bank of America says it has lost "hundreds of millions" of dollars in California’s unemployment fiasco.
- Researchers are developing a color-changing test strip for masks that can detect Covid in a user’s breath or saliva.
- Restaurants can resume outdoor dining, but now owners have to decide whether it's worth the cost.
Before You Go … The Farm Of The Future Is Vertical And In A Warehouse
The exterior of Plenty's vertical farming facility in Compton. (Stefan Slater for LAist)
()
From the outside, the gray and white warehouse near the corner of Oris Street and Mona Boulevard seems like a thousand other mundane Southern California buildings. But the interior, once completed, will resemble a sketch from a futurist's daydreams.
If all goes well, the 95,000-square-foot Compton facility will house rows of hydroponic towers organized into emerald walls of non-GMO, pesticide-free leafy greens that rely on LED lamps, robots, and vertical towers of plants.
Support for LAist comes from
The operation is run by Plenty, a San Francisco-based startup that uses vertical farming to create high-quality, nutritious plants that, in their words, "you'd actually want to eat."
Help Us Cover Your Community
- Got something you’ve always wanted to know about Southern California and the people who call it home? Is there an issue you want us to cover? Ask us anything.
- Have a tip about news on which we should dig deeper? Let us know.
The news cycle moves fast. Some stories don't pan out. Others get added. Consider this today's first draft, and check LAist.com for updates on these stories and more. Follow us on Twitter, Facebook and Instagram.
Never miss an LAist story. Sign up for our daily newsletters.
As Editor-in-Chief of our newsroom, I’m extremely proud of the work our top-notch journalists are doing here at LAist. We’re doing more hard-hitting watchdog journalism than ever before — powerful reporting on the economy, elections, climate and the homelessness crisis that is making a difference in your lives. At the same time, it’s never been more difficult to maintain a paywall-free, independent news source that informs, inspires, and engages everyone.
Simply put, we cannot do this essential work without your help. Federal funding for public media has been clawed back by Congress and that means LAist has lost $3.4 million in federal funding over the next two years. So we’re asking for your help. LAist has been there for you and we’re asking you to be here for us.
We rely on donations from readers like you to stay independent, which keeps our nonprofit newsroom strong and accountable to you.
No matter where you stand on the political spectrum, press freedom is at the core of keeping our nation free and fair. And as the landscape of free press changes, LAist will remain a voice you know and trust, but the amount of reader support we receive will help determine how strong of a newsroom we are going forward to cover the important news from our community.
Please take action today to support your trusted source for local news with a donation that makes sense for your budget.
Thank you for your generous support and believing in independent news.
Chip in now to fund your local journalism
(
LAist
)
Trending on LAist
-
After rising for years, the number of residential installations in the city of Los Angeles began to drop in 2023. The city isn’t subject to recent changes in state incentives, but other factors may be contributing to the decline. -
The L.A. City Council approved the venue change Wednesday, which organizers say will save $12 million in infrastructure costs.
-
Taxes on the sale of some newer apartment buildings would be lowered under a plan by Sacramento lawmakers to partially rein in city Measure ULA.
-
The union representing the restaurant's workers announced Tuesday that The Pantry will welcome back patrons after suddenly shutting down six months ago.
-
If approved, the more than 62-acre project would include 50 housing lots and a marina less than a mile from Jackie and Shadow's famous nest overlooking the lake.
-
The U.S. Supreme Court lifted limits on immigration sweeps in Southern California, overturning a lower court ruling that prohibited agents from stopping people based on their appearance.
Best of LAist