SBA Probe: More than $200 Billion in Pandemic Loans Were Fraudulent

The inspector general for the U.S. Small Business Administration says the agency disbursed more than $200 billion in potentially fraudulent COVID-19 loans through various programs rushed into existence at the dawn of the 2020 pandemic.

In a new report issued this week, investigators identified troubled loans issued through the EIDLs, EIDL Targeted Advances, Supplemental Targeted Advances, and Paycheck Protection Program. The amounts suggest that at least 17 percent of all COVID-19 EIDL and PPP funds were disbursed to potentially fraudulent actors, the SBA said in a news release.

“Using investigative casework, prior OIG reporting, and advanced data analytics, we identified multiple schemes used by fraudsters to steal from the American taxpayer and exploit programs meant to help those in need,” the report declared. “We believe loans identified as potentially fraudulent as part of our review warrant investigation by OIG and its investigative partners. OIG’s oversight and investigative work have resulted in 1,011 indictments, 803 arrests, and 529 convictions related to COVID-19 EIDL and PPP fraud as of May 2023.

OIG’s collaboration with SBA, the U.S. Secret Service, other federal agencies, and financial institutions had resulted in nearly $30 billion from those loans being seized or returned to SBA, with tens of thousands of investigative leads still being explored for fraud, waste, and abuse of taxpayer resources.

“Thousands of investigations will ensue for years to come because of swift congressional action to increase the statute of limitations to 10 years for COVID-19 EIDL and PPP fraud,” the report’s authors said. “We continue to identify fraud schemes, and we anticipate the overall potential fraud estimate could fluctuate; therefore, we may issue periodic updates to this report.”

The full report can be found, here.

Published June 29, 2023