Criminals historically seek to defraud federal government assistance programs, especially in a time of national emergency. The Small Business Administration’s Payroll Protection Program (PPP) has heightened risk due the magnitude of $650B+ in allocated funding, scale of applicant volume with more than 4.4M approved loans, and the speed of execution by nearly 5,000 lenders, many newly approved by the SBA in its new program.
Fraud will be found with business owners inflating the size of payroll to obtain larger loan amounts, deflating employee counts to quality as a small business, and fabricating reports of employees and salaries that never existed. The most obvious form of PPP fraud is found in the criminality of the business owner. Absent credit underwriting, each PPP applicant is required to self-certify as current background checks are too expensive and lengthy.
