Of the $1.2 trillion in federal aid disbursed on an emergency basis to small businesses during the pandemic, at least $200 billion — or 17% — may have gone to scammers.
That's the latest, most complete assessment of potential fraud by the Office of Inspector General of the Small Business Administration, which oversaw the disbursement of the aid.
The report, called "COVID-19 Pandemic EIDL and PPP Loan Fraud Landscape," details how the rush to make the money available made it easier for fraudsters to apply for loans to keep non-existent businesses afloat, and then have those loans forgiven and covered by tax dollars.
"The agency weakened or removed the controls necessary to prevent fraudsters from easily gaining access to these programs and provide assurance that only eligible entities received funds," the report says. "However, the allure of 'easy money' in this pay and chase environment attracted an overwhelming number of fraudsters to the programs."
The OIG says the $200 billion estimate is the result, in part, of "advanced data analytics" of SBA data on the pandemic cash disbursements.
