Report: $5.4B Awarded for Potentially Fraudulent US COVID Loans

Facts

• The Pandemic Response Accountability Committee, the government’s COVID watchdog, released a report on Monday saying that the US government likely gave around $5.4B in COVID loans to people with “questionable” social security numbers.¹
• The report comes as the Republican-led House Oversight Committee holds its first hearing on fraud in pandemic spending on Wednesday. The US government is probing fraud cases related to assistance programs such as Paycheck Protection Program (PPP), unemployment insurance, and Medicare.²
• The report said it identified 69K “questionable” social security numbers used to obtain billions from the Small Business Administration’s (SBA) COVID Economic Injury Disaster Loan (EIDL) program and PPP. Roughly 57.5K PPP forgivable loans worth $3.6B were awarded by Aug. 2020.²
• This is the latest government attempt to crack down on pandemic-related fraud. In May 2021, AG Merrick Garland launched a COVID Fraud Enforcement Task Force and, in 2022, the DOJ charged federal prosecutor Kevin Chambers with leading its investigation into fraudsters abusing COVID relief programs.²
• Senators Rand Paul (R-Ky.) and Joni Ernst (R-Iowa) sent a letter to the Inspector General of the SBA demanding an assessment of the extent of fraud in the SBA COVID programs. The letter specified that the watchdog reviewed over 33M applications, of which 221K used fraudulent SSNs.³
• The EIDL and PPP programs provided nearly $1.2T in COVID assistance to small businesses and their employees from April 2020 to Oct. 2022. The report adds that the desire to implement the programs quickly led to few controls to monitor fraud.⁴

Sources: ¹NBC, ²Reuters, ³FOX News and ⁴Axios.

Narratives

• Republican narrative, as provided by Oversight. The Republican-led House of Representatives was elected to rein in spending and hold President Biden’s administration accountable for their mismanagement of federal dollars. Billions of taxpayer dollars have been given to fraudsters because Biden and Congressional Democrats have been more focused on pushing money out the door than they are on conducting meaningful oversight.
• Democratic narrative, as provided by Coronavirus. Donald Trump and the Republicans are to blame for the potential defrauding of COVID-relief programs. The pandemic started under Trump’s administration, and he failed to implement adequate oversight to protect taxpayer dollars. President Biden is working to clean up his predecessor’s mess.