Following politicians’ warnings about this precise problem regarding stimulus check frauds, a recent government watchdog investigation claims that fraudsters might have escaped with more than $200B in widespread small company loans. The study titled “COVID-19 PPP and EIDL” was produced by the OIG of the Small Business Administration (SBA).
The PPP and COVID-19 EIDL stimulus check funding was distributed by the SBA for about $1.2T. The SBA “calibrated its internal controls in the hurry to promptly distribute the COVID-19 PPP and EIDL stimulus check funds,” according to the government watchdog. The safeguards required to ensure that only qualifying companies got funding and keep fraudsters from having easy access to such programs were reduced or deleted by the agency.
The SBA Has Been Working Towards Anti-Fraud Schemes For Stimulus Check Protection
However, in this pay and pursue atmosphere, the promise of “easy money” drew a disproportionately large number of scammers to the scheme. We predict that SBA distributed about $200B in PPP loans, pandemic EIDLs, and EIDL Advances stimulus checks that may have been fraudulent. This indicates that a minimum of 17% of all pandemic PPP and EIDL stimulus check was paid out to allegedly dishonest individuals.
The Small Business Administration has improved its loan programs’ risk of fraud during the pandemic and stopped more losses, according to the audit, but “the requirement to establish as well as create a successful internal is an ongoing challenge.” Han Nguyen, a spokesman for the SBA, said in a statement that the agency did not see eye to eye with the estimate OIGs provided and believes that fraud likely only amounts to more than $36B across COVID-EIDL and PPP.
It is critical to make clear that eighty-six percent of the COVID-EIDL and PPP programs’ suspected fraud happened in the initial ten months of both schemes, when, as has frequently been emphasized by the Small Business Administration IG, the haste to distribute stimulus checks led to foolish choices to remove anti-fraud safety rails.
