The Pandemic Response Accountability Committee, a federal watchdog monitoring pandemic-era spending, discovered $5.4 billion in “possibly fraudulent pandemic loans” in a report published this week.
In conjunction with the $5.4 billion in loans, PRAC detected 69,323 “questionable” Social Security numbers.
According to the report:
“The PRAC Fraud Alert reveals 69,323 suspect Social Security Numbers were used to receive $5.4 billion from the Small Business Administration’s COVID Economic Injury Disaster Loan program and Paycheck Protection Program. Small companies and their workers affected by the pandemic received over $1.2 trillion in aid through these initiatives.”
Before requesting additional data from the SSA, the committee’s team of data researchers cross-referenced data from over 33 million PPP and EIDL loan applications to publicly available SSA information, determining that 221,427 Social Security Numbers “were either not issued by the SSA” or didn’t “match the name and/or date of birth information” that was provided by loan applicants.
The report of the committee examined loan disbursements from April 2020 to October 2022.
The Small Business Administration’s “initial approach to starting these programs made billions of dollars accessible to millions of borrowers that were affected by the pandemic outbreak, but used few program controls to authenticate applicants’ eligibility before disbursing funds,” according to the report.
“Although the SBA later incorporated certain fraud protection mechanisms in 2021, the initial implementation of PPP put speed of disbursement above inspection of application eligibility, a trade-off that contributed to widespread fraud,” the paper continues.
Interestingly, SBA spokesperson Christina Carr used the contents of the study to criticize former President Trump’s administration, claiming that the report is a “great illustration of why it was a mistake not to adopt further anti-fraud measures under the Trump administration.”
The PRAC study comes as the GOP-led House Oversight Committee plans a hearing on “the flagrant misuse of taxpayer money used on COVID relief programs” this week.
“I don’t think the PPP loan program will fare well in history,” Oversight Chairman James Comer (R-KY) stated Monday.
PRAC Chairman Michael Horowitz, who is also the Inspector General of the DOJ, is scheduled to speak before the Committee. Horowitz will be joined by Comptroller Gen. Gene Dodaro and Assistant Director of the US Secret Service Office of Investigations David M. Smith.
When announcing the hearing, Comer stated that the Oversight Committee owed it to Americans to “determine how hundreds of billions of taxpayer funds spent under the pretext of pandemic assistance were lost to waste, fraud, abuse, and mismanagement.”
“Dems in the Administration and Congress have spent a great deal of time pushing money out the door and far too little time performing meaningful scrutiny of how that money was being used over the last two years,” Comer said.
“That is changing with our Republican majority in the House. The Oversight Committee, led by Republicans, is returning to its fundamental mission of rooting out waste, fraud, abuse, and mismanagement in the federal government and holding President Biden responsible.”
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