DOJ investigating ‘several hundred’ small business loan fraud cases


New details on potentially fraudulent applications for the loan program, which attribute saving millions of jobs, reveal how the rush of aid during the initial pandemic emergency led prosecutors, Democratic lawmakers and taxpayers’ advocates to fear Is widely misused.

FBI Deputy Assistant Director John Jimenez said officials “see individuals who believe fraud was requested or received funds”.

The alleged fraud represents only a small fraction of the $ 525 billion in PPP loans that were awarded to 5.2 million applicants to the program.

Nevertheless, it has caused resentment because some of the money was used for personal wastage such as Rolex watches, luxury cars, Vegas gambling trips and nights in the city at strip clubs.

“I can’t help but be disgusted,” said James Lee, deputy chief of the Internal Revenue Service’s criminal investigation unit.

Warning the fraudsters, he said, “You cannot hide these papers and digital trails that you are following behind us.”

Rabbitt said the fraud update was prompted by prosecutors to reach “significant milestones” of bringing charges against more than 50 individuals. The figure stood at 57 as of Thursday afternoon.

POLITICO reported earlier this week on more than 40 prosecutions filed by the DOJ involving PPP fraud, as well as a separate coronovirus-related disaster loan program run by the Small Business Administration.

Overall, a review of the cases described efforts to divert more than $ 170 million.

In addition to more details on the number of cases, Rabbitt announced a change in the DOJ’s strategy: It would focus on prosecuting coordinated criminal rings engaged in systematic, systematic conduct to rob PPPs.

“We will focus on pursuing these types of cases,” Rabbit said. He said that most of the fraud cases fell into two types — large-scale criminal rings, and “individuals or small groups acting on their own.”