Government’s PPP Program Lost Millions to Scammers

In a new nationwide trend, fraud cases related to the Paycheck Protection Program continue to arise. 

For countless businesses, the PPP was a lifeline that provided loans and guidance in the early weeks of the COVID-19 pandemic. As 2020 comes to a close, it is now clear that the quick rollout of the massive relief program in a matter of months has presented a set of concerning findings. 

Hannibal Ware, the Small Business Administration Inspector General, stated that there are strong indicators of widespread abuse and fraud. In an interview with Pursuit Magazine, he emphasized the severity of the findings. 

“Inspectors General across the Federal Government have seen fraud in programs aimed at the pandemic response. SBA’s pandemic response programs are a particularly attractive target for fraudsters, and SBA OIG’s oversight work has identified gaps in SBA’s internal control environment for these programs. We have seen everything from identity theft to false statements, to fraud schemes perpetuated by sophisticated crime rings.”

Among the list of federal cases, one high school coach is accused of pocketing nearly $1 million dollars and a Florida resident allegedly used his PPP loan to purchase a Lamborghini. 

Seven individuals have also been indicted in Houston, accused of collecting nearly $16 million. 

In Alabama alone, 70,331 businesses received a total of $6.245 billion in PPP loans. News organizations have since filed lawsuits in federal courts to enforce the release of the applications, arguing that other SBA loans are public record. 

Caroline Sicone, executive director of the non-partisan government taxpayer watchdog group, Accountable.US, argues that the PPP loans presented an opportunity for wealthy companies to benefit. 

“For every deserving business that got a loan there was a well connected, wealthy special interest that didn’t need the money,” she said. “All of this should be released. It’s taxpayer money and has always been released in the past.”

As more cases shed a light on the mistakes and lack of regulation, the instances of fraud present an opportunity for hindsight and a lesson for the future. 

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