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The federal government continues to be inundated with reports of potential fraud in the paycheck protection program, according to a report on Sunday.
Congress passed the program to give a hand to small businesses struggling due to the COVID-19 pandemic, but the Inspector General of the Small Business Administration said tens of thousands of businesses that received the PPP loans appeared ineligible, the Wall Street Journal reported.
Some businesses created after the start of the pandemic received a share of the estimated $ 525 billion in loans, as have businesses that exceeded workplace limits of 500 or fewer employees and those included in the federal database. “Don’t pay” because they owed taxes.
Many companies received more money than they were eligible based on their number of employees and pay rates, according to the report.
The program was part of the CARES law passed in March. About 5.2 million businesses received PPP loans between April 3 and August 8.
At the peak of the program, the SBA approved more than 500,000 loans in a single day on Mary 3, according to the Journal.
But banks and the government allowed companies to self-certify they were qualified – and there were few checks.
In September, the Treasury Department said it had received 2,495 reports of suspicious activity involving business loans from banks and other lending institutions – more than any year since 2014, according to the report.
Several hundred investigations have also been launched, involving nearly 500 suspects and hundreds of millions of dollars in loans, the FBI said, according to the report.
The Justice Department said last month that 73 defendants had been indicted in PPP fraud cases, including several over allegations of bogus companies or false documents.
The SBA and the Treasury Department have pledged to verify the program and said they will focus on loans over $ 2 million.
This affects less than 1% of PPP loans and around 20% of all money loaned.
Still, Congress is considering a new batch of loans – and fraud reports could figure in the ruling.
Additional reporting by Jorge Fitz-Gibbon
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