A new watchdog from the federal government has stated that a large group of fraudsters might have escaped with $200 billion in pandemic small business loan Stimulus Checks- something that legislators warned the general public. The Small Business Administration’s Office of Inspector General is behind this report called ‘COVID-19 Pandemic EIDL and PPP Loan Fraud Landscape.”
The SBA had disbursed a sum of $1.2 trillion of Covid-19 Economic Injury Disaster Loan and Paycheck Protection Program funds. The watchdog went on to explain that in the rush to push out the funds, the SBA had calibrated its internal controls, and the agency had weakened the controls that were extremely necessary to prevent the fraudsters from gaining access to the programs- whilst providing them assurance that only the eligible entities received funds.
Stimulus Check Fraud- Lawmakers Holding SBA Responsible
The report also states that the SBA has made massive progress in their attempt to reduce the fraud risks, whilst preventing further losses in its stimulus check programs. But, they have also put forward the need to establish, and use effective internal- which could be a continuing challenge. According to the statement put out by Han Nguyen, a spokesperson for the SBA, the federal agency strongly disagrees with the assessment of the OIG and states that there was some form of fraud across both the PPP and the COVID-EIDL funds- which was around $36 billion.
According to a recent bulletin by the OIG, in collaboration with the SBA, the federal agencies, as well as the US Secret Service, and some of the other financial institutions, around $30 billion in EIDL and PPP funds are now being seized and returned to the SBA. The SBA, on their part, have also received severe scrutiny from the legislators for their stimulus check debacles as well.