Report says federal agency failed to stop billions of dollars in fraudulent PPP loans, as CBS 2 revealed for months
CHICAGO (CBS) — For months we have exposed rampant fraud in the Chicago area during the COVID-19 pandemic.
Now, a new federal report says a US government agency dropped the ball to prevent billions of dollars in fraudulent loans.
CBS 2’s Jermont Terry delved into the scathing report from the Office of the Inspector General of the United States Small Business Administration. The report said the oversight did not exist – the government had no fraud prevention measures in place when it launched the Paycheck Protection Scheme.
The result was billions of your wasted tax dollars.
As the COVID-19 pandemic lingers, the money the federal government handed out to keep businesses prospering is no longer flowing. The Paycheck Protection Program is closed.
A total of $813 billion in PPP loans have been taken, and a new report shows that “more than 70,000 loans totaling more than $4.6 billion in potentially fraudulent PPP loans” are now in question.
For months, CBS 2 exposed massive PPP loan fraud in the Chicago area.
“It’s extremely frustrating to see that money go to people who didn’t deserve it,” Department of Homeland Security special agent Jeff Strauss said Dec. 8. did not help our citizens. This did not help the affected communities.
First, we exposed more than 1,000 ghost businesses in Markham who received Paycheck Protection Program loans for struggling small businesses during the pandemic. The ghost companies had fake addresses and no licenses.
Markham Police Constable Kenneth Muldrow, who received a loan of $20,000 for a lawn care service where he used Markham Police Station as his business address, is still the subject of ‘investigation.
We even revealed how DHS agents were working to find the thousands of people who were essentially stealing from taxpayers who had fraudulently applied for and received the COVID relief money.
“Whether it’s a few thousand dollars or hundreds of thousands of dollars, the outcome is the same,” Special Agent Strauss said Dec. 8. You defrauded the US government and we will find you.
Now the SBA Inspector General’s Office supports our investigations. He says there was no monitoring and adds: “Speed has become the top priority to comply with the mandate.”
All of this involved billions of dollars in your taxes.
The OIG report shows that through May 2021, the SBA “processed 11.8 million PPP guaranteed loans totaling $799.8 billion.”
Just over $800 billion went to 5,460 private lenders, according to the report. Yet when banks attempted to flag problem loans, the OIG found that “the SBA did not provide lenders with enough specific guidance to effectively handle potentially fraudulent PPP loans.”
This has led to loans being approved day by day.
Federal authorities are still collecting information on fraud, and as it stands, they have received more than 54,000 PPP-related complaints from the SBA OIG hotline.