On Thursday, May 15, the Pandemic Response Accountability Committee (PRAC) published a report disclosing that over 40,000 Paycheck Protection Program (PPP) applications in the U.S. contained false or inaccurate information. The committee uncovered notable discrepancies in reported incomes by cross-referencing PPP applicants’ earnings with data from federal housing assistance programs.
The investigation showed that many applicants misrepresented their income, obtaining over $860 million in PPP loans funded by taxpayers. This came as the SBA distributed over $1 trillion in pandemic relief to about 10 million businesses.
One example involved a $20,833 PPP loan based on a reported income of $100,000. The same individual reported an income of $600 to the Department of Housing and Urban Development.
PRAC concluded that most fraud was preventable and urged inspectors, program implementers and policymakers to improve controls and income verification to reduce cross-agency fraud risks.
