A report released by the U.S. Small Business Administration Office of Inspector General (OIG) found that more than $200 billion of COVID relief funding meant for struggling businesses was taken by scammers.
In the 43-page report released Tuesday, Inspector General Hannibal “Mike” Ware writes that of the $1.2 trillion distributed by the SBA for the COVID-19 Economic Injury Disaster Loan (EIDL) and the Paycheck Protection Program (PPP) funds, 17% of the funds were “disbursed to potentially fraudulent actors.”
“The economic assistance was intended to help eligible small business owners and entrepreneurs” who had been affected by the COVID-19 pandemic, said the Inspector General in regards to the SBA’s COVID-relief programs.
There were roughly 4.5 million cases of potentially fraudulent loan and grants issued from the COVID-relief programs, the Inspector General said.
WASHINGTON (AP) — More than $200 billion may have been stolen from two large COVID-19 pandemic-relief programs, new watchdog report says.
— Seung Min Kim (@seungminkim) June 27, 2023
As a result of the OIG’s investigation, “1,011 indictments, 803 arrests, and 529 convictions” were made having to do with PPL and EIDL fraud, the Inspector General in the report.
Roughly “$30 billion in COVID-19 EIDL and PPP funds” have been recovered and returned back to the SBA, the report said.
In an interview with Fox News, Texas Rep. Roger Williams (R) called out the SBA for failing “to implement basic guardrails” which would have protected the programs.
“Roughly 1 in 5 loans dispersed” were “labeled as potentially fraudulent,” said Williams. “When COVID-19 hit the United States, the SBA was tasked with taking on an oversized role to help save small businesses and our nation’s job creators.”
Williams lamented at how the SBA had not been “up to the task.”
SBA spokesperson Han Nguyen said in a statement that “it is vital to clarify that 86% of the likely fraud” had happened within the “first nine months of those programs.”
“The SBA IG has often noted, the rush to get funds out led to unwise decisions to pull down anti-fraud guardrails,” Nguyen said.