A U.S. government watchdog has issued a “deeply disturbing” fraud alert over the widespread use of “questionable” Social Security numbers (SSNs) to get pandemic loans. The Pandemic Response Accountability Committee (PRAC) found that 69,323 potentially fraudulent SSNs were used to obtain $5.4 billion from the Paycheck Protection Program (PPP) and the COVID-19 Economic Injury Disaster Loan (EIDL) program.
The shocking revelation dropped just days before a hearing by the Republican-led House of Representatives Oversight Committee on fraudulent pandemic spending was set to begin. “What PRAC has discovered is deeply disturbing,” said Sens. Rand Paul and Joni Ernst, who are demanding an investigation into COVID-19 loan fraud. “The extent of the fraud could be far greater.”
The Small Business Administration (SBA) launched the PPP and EIDL programs in 2020 to help small businesses and their employees recover from the economic impacts of the pandemic. Over the pandemic, the SBA provided about $800 billion in PPP loans and over $378 billion in EIDL loans — not all of them, it would seem, to deserving businesses and individuals. But with that much money being distributed in pandemic relief — and so quickly — oversight was a must. And so the CARES Act created PRAC for just that purpose. In a review of more than 33 million PPP and EIDL applications, the committee uncovered 221,427 potentially invalid SSNs.