Sens. Paul, Ernst Demand SBA Inspector General Assess, Investigate Widespread Abuse, Fraud Of PPP, EIDL Programs During Pandemic

Dr. Paul, Sen. Ernst Demand SBA Inspector General Assess $5.4 Billion in Small Business Loan Fraud

The senators’ inquiry follows a report by the Pandemic Response Accountability Committee which detailed massive fraud in the Paycheck Protection and Economic Injury Disaster Loan programs

WASHINGTON, D.C. – Yesterday, U.S. Senators Rand Paul (R-KY) and Joni Ernst (R-IA), sent a letter to Hannibal Ware, Inspector General of the U.S. Small Business Administration (SBA) requesting an assessment to determine the extent of fraudulent activity the Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL). The request follows a new Pandemic Response Accountability Committee (PRAC) alert detailing widespread fraud in the programs.

“On January 30, 2023, the Pandemic Response Accountability Committee (PRAC) released a fraud alert detailing widespread fraud of the Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL),” the Senators wrote. “Specifically, PRAC reviewed over 33 million applications and discovered 221,427 applications used fraudulent social security numbers. Of those, 69,323 applications were issued EIDL and PPP loans, totaling over $5.4 billion in funds dispensed to fraudsters.”

“What PRAC has discovered is deeply disturbing and the extent of the fraud could be far greater,” the Senators continued.

Dr. Paul and Senator Ernst are requesting an assessment including:

1. An investigation into the nearly 70,000 PPP loans that were issued, including the potential for recovery of the $5.4 billion dispensed;
2. A review of the actions SBA took with respect to identifying fraud and alerting affected taxpayers;
3. A review of SBA’s failure to take appropriate measures to validate applicants prior to dispensing funds as well as during EIDL servicing and the PPP loan forgiveness process; and
4. A review of SBA’s PPP forgiveness process including its automated and manual checks as well as compliance with the forgiveness audit plan authorized by Section 307 of the Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venues Act.

You can read the letter HERE.

Banner Image: World is Closed. Image Credit – Edwin Hooper

Senator Rand Paul