The Small Business Administration distributed more than $200 billion in potentially fraudulent Covid-19 relief funds, according to a federal watchdog.
The findings, released Tuesday by the SBA’s inspector general, underscored how the emergency funds from the government designed to combat a once-in-a-century pandemic became a magnet for fraudsters.
At least 17% of the $1.2 trillion distributed by the SBA was wasted in fraud, the report found.
To put it another way: The SBA paid out approximately 4.5 million potentially fraudulent loans and grants, amounting to 21% of the total 22.1 million loans and grants that were disbursed.
The fraud estimates focus on two programs rapidly launched by Washington after the health crisis began: the Economic Injury Disaster Loans (EIDL) and the Paycheck Protection Program (PPP), which provided forgivable loans to small businesses.
Most of the fraud apparently happened through the EIDL funds, with the inspector general estimating more than $136 billion of fraudulent activity in that program. Another $64 billion of potential fraud was found to have been distributed in PPP funds.
Read more at CNN.com
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