What Is PPP Loan Fraud? How Do I Report PPP Loan Fraud?

What Is PPP Loan Fraud?

Top 10 Coronavirus Scams

Be on the lookout for and be wary of potential COVID-19 scams and abuses. Any information, complaints, or concerns can be reported to a public regulatory agency.  Its hard to determine which one but here are few FTC, FBI, Dept of Justice, US Attorney's Office, Homeland Security.  Not sure how all of these agencies or coalitions work together but someone they get the bad guys.  

Top 10 most common scams and frauds include: 

• Economic Impact Payment (Stimulus Check):  Scammers pretend to be government officials offering false economic impact payments (stimulus checks) in order to obtain personal identifying information including social security and bank account numbers.

• Diagnosis Testing Scams: Scammers offer fake COVID-19 testing kits, particularly door-to-door.

• Treatment/Cure Scams: Scammers offer fake or unproven treatment regimens that are particularly dangerous because they have the potential to do more harm than good.

• Charity Scams: Virtually every time there is a disaster or emergency, scammers set up fake charities to solicit donations that they then spend on themselves.

• Overinflated prices: The Coalition will use every tool available to hold sellers accountable who unlawfully use the COVID-19 pandemic to unreasonably inflate prices.

• Investment Scams: Scammers make false claims about tests, cures and other matters related to COVID-19 in order to entice victims to make investment decisions based on those false claims that allow the scammer to steal money and assets from Delawareans.

• Email Scams: Scammers send victims emails related to COVID-19 that appear to be from the victims’ banks, health care providers, the World Health Organization, the Centers for Disease Control and Prevention (CDC), and others for the purpose of obtaining the victims’ personal identifying information and exploiting it for the scammers’ own benefit.

• App Scams: Scammers are creating and manipulating mobile apps designed to track the spread of COVID-19 to insert malware that will compromise users’ devices and personal information.

• Insurance, Workers’ Compensation and Medicaid Fraud: Businesses and government agencies are not immune to scams. They should also be vigilant to ensure scammers do not take advantage of their businesses or customers during this pandemic.

• Scams specifically targeted at seniors: Seniors are more vulnerable than ever to common scams like the Grandparent Scam and Government Imposter Scams.  Consumers receiving a call or any contact claiming that loved ones are in danger or hurt, that they owe money and failure to pay will result in their arrest or other harm, or that their benefits are in jeopardy, do not act. Contact your loved ones or the purported agency using known, trusted contact information not sourced from the suspicious communication.

Small Business Lending Fraud

With roughly 26 million Americans filing jobless claims over the last two weeks, and millions of small businesses seeking government aid to stay afloat, the need for the government to immediately push out money to Americans and into the staggering economy could hinder efforts to filter out efforts from potential fraudsters to seek relief funds.

How can 3,500 SBA employees possibly handle 20+ million small business loans?  The SBA just wasn't setup for this administrating disaster relief loans of millions.  

“Everybody’s acceptance of some or a lot of fraud is going to have to be high, because it’s going to happen,” said Earl Devaney, who served as the top watchdog of the Recovery Accountability and Transparency Board, which tracked the stimulus spending following the Great Recession in the late 2000s. Read article. 

This mentality that fraud will be accepted is just wrong. Though the legislation mandates multiple oversight bodies, if even a small percentage of the funds are misused, it could mean fraud on the scale of potentially millions, if not billions, before there are any efforts to recoup losses, according to experts.

They see the $834 billion in funding earmarked for small businesses in the form of forgivable loans as particularly susceptible to abuse. Millions of small business owners began applying to banks for the loans on Friday, though many applicants and lenders experienced problems with the program's rollout.

Other veteran investigators are concerned that the review process, which leaves it up to banks to vet potential borrowers and applicants to attest to their eligibility, doesn’t give authorities enough time to effectively weed out potential fraud.

The $2.2 trillion, 880-page CARES ACT approved by Congress last week included oversight provisions, modeled after some of the safeguards implemented to track the financial system bailout and stimulus money after the Great Recession.

Lawmakers and coronavirus stimulus watchdogs won’t just have this historic $2.2 trillion coronavirus package to police. Conversations have already started on Capitol Hill around a fourth phase of relief funding, including more money for small businesses.

The SBA's directives could create a more equitable distribution of lending power across the industry and get more loans in the hands of businesses, though it's likely that applicants will still struggle to secure them.

The changes mean that the biggest banks may not be able to dominate lending through the PPP, creating an opening for smaller banks. During the first round of PPP fund distribution, more than 25% of the total funding went to fewer than 2% of firms that got relief, in part because banks prioritized existing customers and larger loan applications to yield higher fees — both of which triggered lawsuits — even though the program was supposed to operate on a first-come, first-served basis.

The SBA's new directives mean that some big banks are likely nearing their lending capacity, which could lead some applicants to turn to smaller banks instead, relieving some pressure on application pipelines. And pacing applications could prevent big banks from flooding the SBA with applications, making it less likely that any one lender will receive a disproportionate amount of the available funds. Smaller banks can therefore take advantage of this opportunity to establish relationships with small businesses that were shut out of PPP loans elsewhere.  Read More