A portion of a Small Business Administration Paycheck Protection Program Borrower Application Form is seen in Washington on April 21, 2020. (PHOTO / AP)
NEW YORK - The US federal government squandered more than $200 billion in potential fraud in its aggressive rush to prop up small businesses as the COVID-19 pandemic threatened to shatter the country's economy, according to a report published Tuesday by the inspector general of the Small Business Administration (SBA).
The report of the Small Business Administration focuses on two programs created at the advent of the pandemic to support small businesses, both under the SBA's purview: the Paycheck Protection Program and the Economic Injury Disaster Loans
"The hefty sum, which amounts to approximately 17 percent of the $1.2 trillion dispersed by SBA, updates previous estimates from the inspector general, Hannibal 'Mike' Ware, as investigators from several federal agencies continue to trace and recover millions of dollars lost to fraud, waste and other abuses that occurred during the pandemic," said Eyewitness News.
So far, nearly $30 billion of those fraudulent funds — about 15 percent of the fraud that's been calculated as of May — has been reclaimed through collaboration between the inspector general's office, the SBA, the US Secret Service and other federal agencies, the report said.
Officials said the government watchdog report represents the first comprehensive estimate of fraud to date. The report focuses on two programs created at the advent of the pandemic to support small businesses, both under the SBA's purview: the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loans (EIDL).
According to the report, there was a higher potential fraud in the EIDL program, which was a low-interest disaster loan that would later require repayment. The inspector general's office estimated there was $136 billion of potential fraud in the EIDL program, representing 33 percent of the total funds dispersed to businesses.
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