WASHINGTON — Within days of the launch of the Small Business Association’s new pandemic loan programs, the agency’s inspector general started getting calls from banks trying to report fraud.
“We sat down with the executives at SBA to say we have a problem,” Hannibal Ware, inspector general for the Small Business Administration, testified to the U.S. House of Representatives on Thursday.
Now almost a year later, Ware and his team have identified $78.1 billion in potentially fraudulent Economic Injury Disaster Loans and $3.6 billion in Paycheck Protection Program loans to potentially ineligible recipients. Ware said the fraud identified in the EIDL program in particular was “rampant.”
Government watchdogs testified that the SBA ignored repeated warnings about fraud in the programs as it reduced or eliminated controls designed to root out abuses.
Law enforcement have launched at least 98 publicly-announced investigations into EIDL and PPP loan fraud, Michael Horowitz, the Department of Justice Inspector General testified Thursday.
The Department of Justice has charged an Atlanta reality TV star with bank fraud after he got a $3.7 million PPP loan and allegedly used the proceeds to purchase $85,000 in jewelry, including a Rolex Presidential watch, a diamond bracelet, and a 5.7 carat diamond ring for himself, to lease a 2019 Rolls Royce Wraith, to make loan payments, and to pay $40,000 for child support.
In September, a National Football League player from Florida, Joshua Bellamy, was charged for his alleged participation in a scheme to file fraudulent loan applications seeking more than $24 million in...
from News https://www.ctpost.com/news/article/Watchdogs-More-than-80-billion-of-fraud-in-16056236.php
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