SBA forgave many PPP loans flagged for fraud at end of Trump’s term: audit

      The Small Business Administration flagged more than $189 billion worth of Paycheck Protection Program (PPP) loans as possibly fraudulent, but then botched its oversight and forgave most of the flagged loans, according to a new study by the Project On Government Oversight (POGO), a non-profit and non-partisan government watchdog.

      The flagged loans were supposed to be reviewed before being forgiven. But an auditor found that SBA did not properly review those flagged loans.

      “The data obtained by POGO appears to show mass close-outs of 2.7 million flags on two separate days near the end of the Trump administration. On a third day shortly before President Joe Biden’s inauguration, the SBA cleared out 99.1% of “special review” flags, almost entirely assigned to the very largest PPP loans above $2 million,” per POGO.

      “The SBA applied nearly 98% of its flags between August 2020 and December 2020, then swept away the vast majority of them within the first weeks of 2021,” POGO said. “That means a substantial number of loans flagged as potentially going to fraudsters or ineligible recipients have now been forgiven.”

      To date, SBA has forgiven 95% of all PPP loans, POGO said.

More information:
POGO report: https://bit.ly/3TZAJpG

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