In a letter to Small Business Administration Inspector General Hannibal Ware Tuesday, Republican Senators Rand Paul and Joni Ernst revealed billions of dollars in COVID-19 pandemic loans were obtained with fake or stolen social security numbers.
"On January 30, 2023, the Pandemic Response Accountability Committee (PRAC) released a fraud alert detailing widespread fraud of the Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL). Specifically, PRAC reviewed over 33 million applications and discovered 221,427 applications used fraudulent social security numbers. Of those, 69,323 applications were issued EIDL and PPP loans, totaling over $5.4 billion in funds dispensed to fraudsters,” the Senators wrote in a letter to Ware.
"The Social Security Administration confirmed that the 221,427 Social Security Numbers (SSNs) used on applications were either not issued by SSA or that identifying information in SSA's records did not match, suggesting potential identity fraud in use of those SSNs," the letter continues.
The Pandemic Response Accountability Committee, which initially found the fraud, explains the findings in a new report.
"The PRAC determined that $5.4 billion in COVID-19 EIDL or PPP loans was disbursed to applicants using 69,323 of those SSNs between April 2020 and October 2022. The PRAC further determined that 175,768 of the SSNs were used in COVID-19 EIDL and/or PPP applications that were not disbursed by SBA," PRAC found.
Further, it appears the fraud could have been prevented.
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"The PRAC identified $5.4 billion in potential identity fraud associated with 69,323 questionable and unverified SSNs used across disbursed COVID-19 EIDL and PPP applications—that is, applications that successfully received a loan and/or grant," PRAC found. "Eligibility for these disbursements could have been questioned further by SBA before the loan and/or grant had been disbursed if the COVID-19 EIDL and PPP loan programs required SBA—or SBA otherwise had access to information necessary—to verify the accuracy of SSNs and the associated information on borrower applications, such as the applicants’ full names and dates of birth."
(Graphic courtesy of Pandemic Response Accountability Committee)
As a result, Paul and Ernst are calling on Ware to launch an investigation into the fraud reviewing 74,000 loans totaling more than $5.4 billion. They're also asking for Ware to analyze how to prevent this type of SBA fraud in the future
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