The report says the federal agency has failed to prevent billions of dollars in fraudulent PPP loans, CBS exposed for 2 months
CHICAGO (CBS) – For months we have uncovered 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 pored over the damning report from the US Small Business Administration Office of Inspector General. According to the report, there was no oversight — the government hadn’t implemented fraud prevention measures when it launched the Paycheck Protection Scheme.
The result was billions of your tax dollars wasted.
As the COVID-19 pandemic continues, the money the federal government has been spending to keep the business thriving has stopped flowing. The Paycheck Protection Program has been shut down.
In all, $813 billion in PPP loans has been issued, and a new report shows that “more than 70,000 loans totaling over $4.6 billion in potentially fraudulent PPP loans” are now under question will.
For months, CBS 2 exposed massive PPP loan fraud in the Chicago area.
“It’s extremely frustrating to see this money going to people who don’t deserve it,” Department of Homeland Security special agent Jeff Strauss said Dec. 8. “And then it’s just gone. It didn’t stay in our country didn’t help our citizens. It has not helped the affected communities. It’s just gone.”
First, we uncovered over 1,000 ghost businesses in Markham that received Paycheck Protection Scheme loans intended for small businesses struggling during the pandemic. The ghost shops had fake addresses and no licenses.
Markham Police Officer Kenneth Muldrow is still under investigation for receiving a $20,000 loan for a lawn care service using the Markham Police Department as his business address.
We even revealed how DHS agents worked to find the thousands who essentially stole from taxpayers who fraudulently applied for and received the COVID relief money.
“Whether it’s a few thousand dollars or hundreds of thousands of dollars, the result is the same,” Special Agent Strauss said Dec. 8. You have betrayed the United States government and we will find you.”
Now the SBA Office of Inspector General is assisting our investigation. She says there was no oversight, adding: “Speed was the top priority in fulfilling the mandate.”
This all involved running out of billions of your tax dollars.
The OIG report shows that as of May 2021, the SBA had “processed 11.8 million guaranteed PPP loans totaling $799.8 billion.”
A little over $800 billion went to 5,460 private lenders, according to the report. However, when banks attempted to flag problem loans, the OIG found that “the SBA failed to provide sufficient specific guidance to lenders to effectively manage potentially fraudulent PPP loans.”
This resulted in loans being approved day after day.
Federal agencies are still collecting fraud leads and have received more than 54,000 PPP-related complaints to the SBA OIG hotline to date.