Current:Home > MarketsSmall businesses got more than $200 billion in potentially fraudulent COVID loans, report finds-Angel Dreamer Wealth Society D1 Reviews & Insights
Small businesses got more than $200 billion in potentially fraudulent COVID loans, report finds
View Date:2024-12-23 22:55:51
More than $200 billion in federal aid to small businesses during the pandemic may have been given to fraudsters, a report from the Small Business Administration revealed on Tuesday.
As the agency rushed to distribute about $1.2 trillion in funds to the Economic Injury Disaster Loan and Paycheck Protection programs, it weakened or removed certain requirements designed to ensure only eligible businesses get funds, the SBA Office of Inspector General found.
"The pandemic presented a whole-of-government challenge," Inspector General Hannibal "Mike" Ware concluded in the report. "Fraudsters found vulnerabilities and coordinated schemes to bypass controls and gain easy access to funds meant for eligible small businesses and entrepreneurs adversely affected by the economic crisis."
The fraud estimate for the EIDL program is more than $136 billion, while the PPP fraud estimate is $64 billion. In earlier estimates, the SBA inspector general said about $86 billion in fraudulent loans for the EIDL program and $20 billion in fraudulent loans for the PPP had been distributed.
The SBA is still conducting thousands of investigations and could find further fraud. The SBA has discovered more than $400 billion worth of loans that require further investigation.
Under the Coronavirus Aid, Relief and Security Act, signed into law by President Trump in 2020, borrowers could self-certify that their loan applications were accurate.
Stricter rules were put in place in 2021 to stem pandemic fraud, but "many of the improvements were made after much of the damage had already been done due to the lax internal control environment created at the onset of these programs," the SBA Office of Inspector General found.
In comments attached to the report, Bailey DeVries, SBA's acting associate administrator for capital access, emphasized that most of the fraud — 86% by SBA's estimate — took place in the first nine months after the loan programs were instituted.
Investigations into COVID-19 EIDL and PPP fraud have resulted in 1,011 indictments, 803 arrests, and 529 convictions as of May, officials said. Nearly $30 billion in funds have been seized or returned to the SBA.
The SBA inspector general is set to testify before the House Small Business Committee to discuss his findings on July 13.
The SBA is not alone in falling victim to fraud during the pandemic. The Labor Department estimated there was $164 billion in improper unemployment fraud payments.
The GOP-led House Oversight Committee has been targeting fraud in COVID relief programs.
"We owe it to the American people to get to the bottom of the greatest theft of American taxpayer dollars in history," Committee Chairman Rep. James Comer, Republican of Kentucky, previously said.
In March, President Biden's administration asked Congress to agree to pay more than $1.6 billion to help clean up COVID fraud. During a call with reporters at the time, White House American Rescue Plan coordinator Gene Sperling said spending to investigate and prosecute fraud would result in returns.
"It's just so clear and the evidence is so strong that a dollar smartly spent here will return to the taxpayers, or save, at least $10," Sperling said.
Aliza ChasanAliza Chasan is a digital producer at 60 Minutes and CBS News.
TwitterveryGood! (5984)
Related
- Michael Jordan and driver Tyler Reddick come up short in bid for NASCAR championship
- Chappell Roan brings campy glamour to MTV VMAs, seemingly argues with photographer
- The Mississippi River is running low again. It’s a problem for farmers moving beans and grain
- Man convicted of killing Chicago officer and wounding her partner is sentenced to life
- Shocked South Carolina woman walks into bathroom only to find python behind toilet
- NFL sets record, averages 21 million viewers per game in Week 1
- Johnny Gaudreau and Matthew Gaudreau’s Sister Katie Speaks Out After Their Tragic Deaths
- Wholesale inflation mostly cooled last month in latest sign that price pressures are slowing
- Voters in Oakland oust Mayor Sheng Thao just 2 years into her term
- Nikki Garcia files to divorce Artem Chigvintsev weeks after his domestic violence arrest
Ranking
- Taylor Swift touches down in Kansas City as Chiefs take on Denver Broncos
- 2024 MTV VMAs: Halsey Teases Marriage to Avan Jogia Amid Engagement Rumors
- Over 40,000 without power in Louisiana as Hurricane Francine slams into Gulf Coast
- Fearless Fund settles DEI fight and shuts down grant program for Black women
- Suspected shooter and four others are found dead in three Kansas homes, police say
- Where did the Mega Millions hit last night? Winning $810 million ticket purchased in Texas
- When Will the EV Sales Slump End? Here’s What the Experts Say
- Taylor Swift makes VMAs history with most career wins for a solo artist
Recommendation
-
Kennesaw State football coach Brian Bohannon steps down after 10 seasons amid first year in FBS
-
2024 MTV VMAs: Eminem Proves He’s Still the Real Slim Shady With Rousing Opening Performance
-
Volkswagen is recalling close to 99K electric vehicles due to faulty door handles
-
Déjà vu: Blue Jays' Bowden Francis unable to finish no-hitter vs. Mets
-
Controversial comedian Shane Gillis announces his 'biggest tour yet'
-
Oklahoma State coach Mike Gundy delivers truth bomb about reality of paying players
-
Apple Watch Series 10: a larger and brighter screen, here is what we know
-
The Latest: With the debate behind them, Harris and Trump jockey for swing states