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Investigators have charged big spenders with cheating the Paycheck Protection Program for small businesses. But more fraud lies below the surface, and it’ll be harder to find.
The Justice Department has made at least 41 criminal complaints in federal court against nearly 60 people, who collectively took $62 million from the P.P.P., the federal government’s signature coronavirus relief program for small businesses, by using what law enforcement officials said were forged documents, stolen identities and false certifications.
The criminal complaints read like catalogs of luxury bling: a diamond-laden $52,000 Rolex, a gambling spree at the Bellagio, two Lamborghinis, a pair of Cadillac Escalades, a Rolls-Royce.
They are just “the smallest, tiniest piece of the tip of the iceberg,” said Hannibal Ware, the inspector general of the Small Business Administration, which led the program.
But with their ostentatious spending and clearly faked records, those alleged thefts have also been the easiest to spot.
The relief program, a centerpiece of the CARES Act, poured $525 billion into the economy in just four months before coming to an end. More than five million businesses received loans, which could be forgiven if used for payroll and certain other expenses. Now, that hastily created and frequently chaotic program is entering its next messy stage, one that lenders and government officials expect to take years: the hunt to recapture illicitly obtained cash.
The challenge facing scores of state and federal agencies is enormous. The S.B.A.’s fraud hotline, which received fewer than 800 calls last year, has already had 42,000 reports about coronavirus-linked graft.
Article source: https://www.nytimes.com/live/2020/08/28/business/stock-market-today-coronavirus