If you thought the distribution allocation and creation of the PPP loans couldn’t get any worse, you were so very wrong.
“Lenders participating in the Paycheck Protection Program (PPP) distributed the cash to 4,260 borrowers who had already received funds due to multiple technical glitches within the SBA’s loan processing systems, which struggled to process the volumes of loans, the SBA Inspector General wrote in a report.
The watchdog did not say how much if any of the $692 million mistakenly distributed by lenders had subsequently been reimbursed by the government. It initially said it would only guarantee one loan per borrower, meaning lenders, rather than the taxpayer, may be on the hook for the error. –Reuters
The glitch occurred after an SBA computer program designed to detect duplicate applications failed when switching an applicant’s Social Security number and employee identification number were switched around on the second application.
At one point, more than 40,000 duplicate loans were issued, only to be caught before most of the lenders distributed the cash.
Meanwhile as we reported last month, Office of Inspector General (DOL-OIG) has found an unprecedented amount of fraud in the unemployment program created by the CARES Act – estimating that at least $63 billion of the $630 billion in disbursements were squandered by fraudsters. The agency warns that taxpayer funds loss could be higher, with some figures suggest north of $100 billion.”
Not all of them got away with the money, however. At least one of the fraudsters got caught pilfering over $5.5 million, but others got fancy cars, mansions and crypto with your tax money via the PPP last year.
Zero Hedge Continues:
California observed a great deal of unemployment fraud. One rapper netted $1.2 million in an unemployment benefits scheme. He even made a video about the scam. He gave a “shoutout” to President Trump for the CARES Act.
Orange County District Attorney Todd Spitzer said this “isn’t just a California problem – it’s a breakdown of catastrophic proportions that has failed the American taxpayer.”
The Justice Department has launched a task force to find pandemic aid fraudsters across the country – it’s only now that the true extent of the loss is being realized.
“Early indications in some states point to massive problems,” said NBC.
A shocking review of pandemic aid payments last June revealed Nebraska’s auditor found two-thirds of unemployment payouts were misspent. Kentucky’s auditor found that its vetting process was so inadequate that it breached federal law.
Read the rest of the February report here.