The US government has issued more than $5 billion in “potentially fraudulent” pandemic-related loans, the federal regulator, which oversees spending on coronavirus relief, said Monday.
Driving the news: The Pandemic Response Accountability Committee said it found more than 69,000 “questionable” Social Security numbers were used in successful federal emergency loan applications.
- The watchdog’s analysis focused on the Economic Injury Disaster Loan and Paycheck Protection Programs, which collectively provided “nearly $1.2 trillion in support for small businesses and their employees impacted by the COVID-19 pandemic.”
Using the numbers: The PRAC identified the suspect social security numbers by matching data from more than 33 million EIDL and PPP applications with publicly available information from the social security administration about potentially invalid or spoofed social security numbers.
- The PRAC found 2.7 million social security numbers falling under these categories in the application data. The watchdog then worked with the SSA to validate the numbers and said 221,427 of them were “flagged for potential identity fraud”.
- Of those Social Security numbers, 69,323 were “associated with disbursed loans and/or grants,” the watchdog said.
- Specifically, these numbers were used for 99,180 PPP and EIDL program applications submitted between April 2020 and October 2022.
What you say: The watchdog’s report said the PPP and EIDL programs “were more vulnerable to fraud due to the heightened urgency for authorities to provide timely assistance to applicants in response to the COVID-19 pandemic.”
- “[The Small Business Administration’s] The initial approach to implementing these programs quickly provided billions of dollars to millions of borrowers impacted by the pandemic, but used few program controls to verify applicant eligibility before disbursing funds Report.
The big picture: The PRAC oversees the distribution of more than $5 trillion in federal stimulus approved by Congress since 2020 under both the Trump and Biden administrations.
- The Republican-controlled House Committee on Oversight and Accountability will hold its first public hearing on Wednesday “to examine the rampant waste of taxpayer dollars in COVID relief programs.”
- Republicans on the committee have invited Justice Department Inspector General Michael Horowitz — the chairman of the PRAC — to testify alongside other federal officials.