PROVIDENCE, R.I. (WPRI) – Michele Graziano in October started receiving monthly bill notifications from the U.S. Small Business Administration for a loan made out to Graziano Poultry Farm, telling her she had until next fall to start paying it back.

But Graziano doesn’t have a chicken farm. She doesn’t even own chickens.

In fact, she lives in a three-room condo in West Warwick and never asked for any money from the federal agency responsible for distributing billions of dollars to small businesses floundering amid the coronavirus pandemic.

“There’s no poultry running around here,” Graziano told Target 12.  

Fraud tied to the SBA’s coronavirus disaster loan program, known officially as the Economic Injury Disaster Loans program, has run rampant across the country since it launched in the spring, according to a federal report examining the issue. And Rhode Island is no different, as people like Graziano – many of whom don’t own businesses – are beginning to receive notices for loans they never asked for.

The SBA Rhode Island office declined to comment for this story.

Target 12 extrapolated a list of every Rhode Island borrower that supposedly participated in the program after the agency was legally compelled to release the information earlier this month. The data shows nearly $562 million was approved for at least 10,000 borrowers with Rhode Island addresses. That’s equivalent to more than 10% of the state’s small businesses, or outfits with fewer than 500 employees, as defined by the SBA. (The list doesn’t include the thousands of loans made through the bridge-loan program known as “Economic Injury Disaster Loans Advance,” which were capped at $10,000 each.) 

Apparently, farm businesses were a popular disguise. Target 12 narrowed down the list of borrowers to only those with “farm” in the name and found dozens that don’t exist in the database of registered businesses maintained by the R.I. Secretary of State’s Office.

Because some business owners don’t always operate under their registered names, Target 12 cross-referenced the suspicious companies through Google searches. If no websites or references appeared, Target 12 then cross-referenced each company address against local tax assessors’ databases and reached out to the owners at each location.

The investigation unveiled $3.8 million was approved to at least 80 “farm” businesses that don’t exist. And each of the fake farms was either listed at a single-family home, apartment complex or other non-farm property.

A data visualization of where the fake farms are located in Rhode Island

(12 News graphic created by Lisa Mandarini)

Target 12 then visited several of the locations, including a phony chicken farm on Main Street in Coventry and a fake duck farm in a single-family home in Providence.

In East Providence, Kyle Fernandes answered the door and confirmed someone took out a $28,000 SBA disaster loan under his family’s name for a cattle farm. The news came as quite a shock to the Fernandes’s, considering their suburban home on 0.1 acre of land doesn’t have space for a single cow — let alone cattle.

“We thought it was hilarious,” Fernandes said in front of his ranch-style home. “And then we freaked out a little bit because we’re like, ‘Wait, this is hilarious, but also this is real, so we have to take care of it.'”

Similarly, in Jamestown, Terri North was startled when she started receiving a monthly bill for a $57,500 disaster loan approved for North Poultry Farm. North has no chickens at her single-family home.

“It’s a neighborhood,” she said. “I don’t think they would even allow that.” 

The list of fake farms even included Ayars Livestock Farm, a fraudulent establishment supposedly owned by Kenneth Ayars, the head of agriculture at the R.I. Department of Environmental Management, which oversees all farming business in Rhode Island.

“I have a hobby farm and certainly no livestock other than my six chickens,” Ayars told Target 12, confirming he fell victim to identity theft and that a $36,000 SBA loan was fraudulently taken out in his name. Ayars Livestock Farm does not exist.

“A $36,000 loan for six chickens is pretty steep,” he quipped.

Ayars, a stalwart of the Rhode Island farming community, where he’s been working for decades, reviewed Target 12’s list of suspicious farm businesses and confirmed none were known to him or his staff.

But it’s not just farm businesses that are getting caught up in the scheme. Target 12 also identified several other suspicious business names. In Middletown, Emily Reynolds said a fraudulent loan was taken out for a fake business listed at her single-family home. The name of the businesses was just her maiden name.

Target 12 confirmed the fake business was approved for a $22,500 loan.

Reynolds, like many of the people interviewed by Target 12, said she reported the information to several different agencies, including the SBA inspector general, and was told the loan was under review. Loan payments under the program are typically deferred for one year after the borrowing date.

Paying back the loan wouldn’t ruin Reynolds financially, she said, but she’s hoping it doesn’t come to that. And she’s concerned about how easily her identity was stolen and used to get money that she wishes was loaned to an actual business in need.

“There are a lot of people who are in a tight spot under a lot of pressure and need some relief and this is exactly what we need,” Reynolds said. “The downside is that it’s become easier for people who are defrauding.”

Search the SBA database of all borrowers with Rhode Island addresses

The SBA inspector general released a scathing report in October, indicating widespread fraud was indeed tied to the disaster loan program. The report showed the SBA approved $14.3 billion to accounts that differed from the original bank accounts listed on the loan applications.

Nearly $63 billion was approved to applicants who used the same IP addresses, email addresses, bank accounts or businesses listed at the same addresses. SBA leadership disputed the report.

“SBA’s initial response to implement the COVID-19 [disaster] loan program made billions of dollars of capital available to provide prompt economic relief to businesses affected by COVID-19,” SBA Inspector General Hannibal “Mike” Ware wrote in the October report.

“To expedite the process, SBA ‘lowered the guardrails,’ or relaxed internal controls, which significantly increased the risk of program fraud,” he added.

Congress over the weekend reached an agreement on a new $900 billion stimulus package, which if approved would include another $20 billion for the disaster loan program. In a letter to fellow Democrats, House Speaker Nancy Pelosi described the loans as “critical to many smaller businesses on Main Street.”

In Rhode Island, Target 12 identified at least two farm businesses tied to a single-family address in North Kingstown. In another example, multiple people with the same last name were meant to have a fish farm, a poultry farm and a pig farm in West Warwick, Johnston and Providence, respectively. Two are listed at single-family properties in residential neighborhoods. The third is in a condo. None are actual businesses.

There are also signs that the fraud tied to the SBA program could be connected to the fraud plaguing the state’s unemployment insurance program – also a problem in other states. Target 12 confirmed fraud in the two programs have overlap, and both Ayers and Reynolds were contacted after someone tried to fraudulently file claims in their names.

“It’s unfortunately all too common,” Ayars said.

When asked what he thought about so many seemingly fake farms being connected to the program, Ayars said there was some irony to it. With the exception of wholesalers and outfits with direct sales to the sputtering restaurant industry, the pandemic has largely resulted in a boom for many in farming, decreasing the need to borrow money.

Rhode Islanders shying away from going out to eat coupled with an increased interest in farmers markets and supporting local businesses has spelled success for many local farmers, Ayers said.

“It’s actually been an economic boost for some people,” he said.

Anyone who believes they might be the victim of fraud is encouraged to reach out to the following:

Eli Sherman ( is a Target 12 investigative reporter for 12 News. Connect with him on Twitter and on Facebook.

Tim White ( is Target 12 managing editor and chief investigative reporter and host of Newsmakers for 12 News. Connect with him on Twitter and Facebook.

Rochelle Medeiros and Hannah Dickison contributed to this report.