The COVID-19 relief programs established through the congressional CARES Act have helped save jobs -- but their legacy may be tarnished by unprecedented amounts of fraud.
, are winding down. But for all the jobs they've rescued, their legacies may be tarnished by unprecedented amounts of fraud -- a reality that experts fear may impair efforts to pass future emergency relief programs.
A senior SBA official in the Biden administration agreed with Ware's analysis, noting that"it should not be an expectation that we need to sacrifice speed for certainty -- you can do both." Ware said this is precisely what his office sought to avoid. Before PPP and EIDL were even finalized, the SBA inspector general's office submitted three reports to the SBA"detailing the importance of up-front controls," according to Ware. During the testy exchanges in the spring of 2020, he said he warned the SBA to"pump the brakes" on the process.
That figure, however, reflects only a fraction of what experts believe was defrauded. Of the more than $1 trillion distributed, Ware and others estimate that more than 5% of transactions were fraudulent -- a stunning rate that would suggest tens of billions of dollars lost.
For those found guilty, prosecutors are seeking harsh penalties; last week, a Texas man who submitted false documents and received more than $17 million in PPP loans was sentenced to 11 years in prison and ordered to pay back $17 million in restitution. He had used the illicit funds to purchase multiple homes and a fleet of luxury cars, including a Bentley convertible, a Corvette Stingray and a Porsche Macan.
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