Small Business Association Confirms Scammers Reaped More Than $200B From PPP Programs

A new report from the Small Business Administration’s Office of Inspector General (SBA OIG) shows more than $200 billion disappeared from COVID relief programs.

In 2020, Congress allocated $1.2 trillion to the Economic Injury Disaster Loan Program (EIDLP) and the Paycheck Protection Program (PPP) to help business owners through the COVID-19 pandemic.

According to the SBA report, the amount was 17% of the total amount given to the program. Although the agency has already prosecuted dozens of people for fraud, it still has more than 90,000 “actionable leads” on others who have taken from the COVID relief programs.

The report also states there are currently 570 investigations related to fraud from the two COVID programs, and more than 800 arrests related to the two programs have been made through May 2023. More than $9 billion has been recovered through fines and forfeitures. Another $8 billion in EIDL funds have been returned to the SBA by financial institutions, and another $20 billion by borrowers.

The New York Post reports one of the most egregious fraudsters was Donald Finley, the now-closed Jekyll & Hyde restaurant owner. Finley used millions he received from the two COVID programs to purchase a home in Nantucket and is now facing up to 30 years in prison, a $1.25 million fine, and could be forced to pay more than $3.2 million in restitution.

Experts added that it was easy to take money from the COVID programs because all of the information business owners needed to receive funds were self-reported. Additionally, none of the information was verified or checked to save valuable time for business owners and entrepreneurs.

The fraud got so out of hand that it was hard for many to find and purchase luxury items during 2020.

“During the height of the pandemic, it was really hard to purchase [luxury] items like a Rolls-Royce or a high-end Mercedes because you had people walking in with cash from the PPP program to purchase those items for whatever the dealer was asking,” Haywood Talcove of LexisNexis Risk Solutions told the Post.

People who committed fraud to receive money used it to purchase everything, including homes, luxury watches, Lamborghinis, Land Rovers, and other luxury cars, clothing, plastic surgery, luxury trips, and even private jets.