According to US officials and public data, the government is swamped with reports of potential fraud in the Paycheck Protection Program, casting a shadow on one of Washington’s signature responses to the coronavirus pandemic.
Last month, the Small Business Administration’s inspector general, an arm of the agency that administers the PPP, said there were “strong indicators of widespread potential abuse and fraud in the PPP.” The Treasury Department received 2,495 suspicious-activity reports in September, involving business loans from banks and other depository institutions. This was more than the total for any year dating back to 2014.
According to the FBI, hundreds PPP-related investigations have been opened, involving close to 500 suspects and hundreds of millions of dollars of loans. Many involve allegations of made-up companies or forged documents.
“With the passage of time it becomes much more troubling when the fraud framework is not in place,” said William Shear, director in the GAO’s financial market and community investment team, at an Oct. 1 hearing before the House Small Business Committee. “There are too many questions that go unanswered.”