Crackdown on Suspected Fraudulent Small Business Loans: $22.2 Billion Referral to Treasury Sparks Investigations
The U.S. Small Business Association has referred over 562,000 suspected fraudulent loans totaling more than $22.2 billion to the U.S. Department of Treasury for collections. These loans, primarily from the Paycheck Protection Program (PPP) and the COVID Economic Injury Disaster loan program, were flagged for suspected fraud during the previous administration but were not sent for collections. The SBA accused the former administration of protecting suspected fraudsters by not referring them to Treasury.
In addition to referring the loans to Treasury, the SBA has also referred the borrowers to the U.S. Department of Justice. None of the 560,000 borrowers had been compelled to repay the $22.2 billion they owed, and less than 1,000 were facing investigations from the SBA's Office of Inspector General. The effort to seek repayment from the borrowers is led by the White House Task Force to Eliminate Fraud, headed by Vice President JD Vance and Federal Trade Commission Chair Andrew Ferguson.
The administration estimates that at least $200 billion of the $1.2 trillion in PPP and EIDL loans approved by the SBA between 2020-2021 is fraudulent. The SBA has implemented new measures to combat fraud, including citizenship and birthdate verifications and state-by-state investigations into fraudsters. Nearly 112,000 borrowers suspected of obtaining fraudulent loans in California and Minnesota have already been suspended by the agency.
Fox News Digital reached out to the Department of the Treasury, the Small Business Association, and the Federal Trade Commission for comment but did not receive an immediate response. The crackdown on fraudulent loans is part of a broader anti-graft push overseen by the White House Task Force to Eliminate Fraud, aiming to hold fraudsters accountable and recover stolen taxpayer dollars.