Last Thursday, the Government Accountability Office (GAO) released a report saying that the Paycheck Protection Program (PPP), which stopped accepting applications yesterday, almost certainly fell victim to a significant amount of fraud. Given the $670 billion scope of the program, that was a given — and there have already been charges from the Department of Justice in Massachusetts, Texas, Iowa and New York.
“Because of the number of loans approved, the speed with which they were processed, and the limited safeguards, there is a significant risk that some fraudulent or inflated applications were approved,” the GAO report stated.
The question that the report didn’t answer was: How much fraud are we talking about? According to Tom Miller, the CEO of risk-management firm ClearForce, we’re probably looking at a big chunk of stolen change — big with a capital B. “We estimate there’s more than a billion dollars worth of verified criminal fraud within the PPP program,” Miller says. “And the big point here is that there’s a fixed pot of money in the PPP program. So that’s a billion dollars that didn’t make it to legitimate businesses who really need economic support because it was misdirected to fraudsters.”