Current:Home > Contact-usSmall businesses got more than $200 billion in potentially fraudulent COVID loans, report finds-LoTradeCoin
Small businesses got more than $200 billion in potentially fraudulent COVID loans, report finds
View Date:2024-12-23 19:20:35
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! (8947)
Related
- Young Black and Latino men say they chose Trump because of the economy and jobs. Here’s how and why
- Sydney Sweeney, Alix Earle & More Stars Love This Laneige Lip Mask That's on Sale for Amazon Prime Day
- The future of electric vehicles looms over negotiations in the US autoworkers strike
- Former Haitian senator pleads guilty in US court to charges related to Haiti president’s killing
- Quincy Jones' cause of death revealed: Reports
- Suspect arrested after mother and son found shot to death inside burned home
- Search for nonverbal, missing 3-year-old boy in Michigan enters day 2 in Michigan
- Carey Mulligan Confirms She and Husband Marcus Mumford Privately Welcomed Baby No. 3
- A pair of Trump officials have defended family separation and ramped-up deportations
- Bedbugs can’t really hurt you. But your fear of them might, experts say.
Ranking
- Mandy Moore Captures the Holiday Vibe With These No Brainer Gifts & Stocking Stuffer Must-Haves
- California Gov. Gavin Newsom signs bill expanding conservatorship law
- Israeli village near the Gaza border lies in ruin, filled with the bodies of residents and militants
- 'Feels like the world is ending': Impacts of strikes in Gaza already devastating
- Ford agrees to pay up to $165 million penalty to US government for moving too slowly on recalls
- 'This is against all rules': Israeli mom begs for return of 2 sons kidnapped by Hamas
- From Candy Corn to Kit Kats: The most popular (and hated) Halloween candy by state
- White House condemns a violent crash at the Chinese Consulate in San Francisco
Recommendation
-
Off the Grid: Sally breaks down USA TODAY's daily crossword puzzle, Red Velvet, Please
-
Judge’s order cancels event that would have blocked sole entrance to a Kansas abortion clinic
-
Why Meghan Markle Says She's Frightened for Her Kids' Future in a Social Media Age
-
LIV Golf loses bid for world golf ranking points due to format issues
-
Pistons' Tim Hardaway Jr. leaves in wheelchair after banging head on court
-
Aaron Rodgers says he's not in 'vax war' with Travis Kelce, but Jets QB proposes debate
-
Why Brody Jenner Drank Fiancée Tia Blanco's Breast Milk in His Coffee
-
Sweden’s police chief says escalation in gang violence is ‘extremely serious’