Just last week, the Biden administration extended the statute of limitations of SBA/PPP fraud to 10 years, which means that those who took these loans out illegally — or mishandled them — will be on the hook for years to come. This is just one small good sign in what otherwise has been a disaster for our economy and for inequality.
Of the $813 billion that went out for the Paycheck Protection Program (PPP) during the pandemic, it is suspected that at least 10% of that ($80+ billion) was taken fraudulently. The CARES Act stimulus was passed in a hurried effort to get money directly into the hands of American workers and employers, but now that some time has passed, this effort is now being viewed as “the biggest fraud in a generation”, a “looting” of the COVID relief program, and the “$100 billion scam that ruined America's economy.”
The issues we're currently facing with inflation, runaway housing costs, and the widening equity gap was exacerbated by CARES Act stimulus. Say you were a banquet waiter at a hotel before the pandemic and then were laid off when events suddenly stopped. You qualified for your state's unemployment plus the additional $600/week that was provided in the spring and summer of 2020. But say you were a grocery store employee in March 2020 instead. You likely didn't make anything extra at all. If anything, you were worked more than ever and risked your own personal health to be in that store.
However, the story is different for sole proprietors and business owners. While wage workers got crumbs ($1,400 checks), and unemployed workers got a small meal (~$25,000 in unemployment benefits), small business owners were taking out anywhere from $100,000 to $1 million — or more — for each of the two rounds of PPP funding. And guess what? It was all forgiven. These were not loans that required proof of hardship, nor “means tested” loans.
The sad reality is that it could be difficult to prove fraud as the PPP money was intended to cover employee wages/salaries, company rent, and other business expenses. Say a business owner took out a $1 million PPP loan — so long as they paid that money out to staff and on company costs, it will likely be forgiven and that'll be the end of it. However, companies that were not necessarily struggling — or didn't even need the money — could take a loan, pay their staff salaried with that money, and then keep their typical earnings/revenue as net income (profit).
Here's where to start:
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Report fraud anonymously through the SBA's Office of Inspector General online or by calling 800-767-0385.
Please note that if you report a case anonymously, the SBA will not be able to follow up with you for more details and they will be unable to let you know the outcome of your tip. And don't assume that by simply reporting suspected fraud that you have done your part — please do your own due diligence as much as possible and only submit something that you truly believe was immoral, unethical, and/or illegal.
Thank you all and Godspeed to the working class.