US crackdown on COVID loan fraud: 80 charged, $200bn stolen from SBA programmes

The Trump administration has launched Operation No Doze, targeting COVID-era small-business loan fraud. Over 80 individuals have been charged and 870,000 borrowers suspended.

Trump administration targets COVID-era loan fraud with mass demand letters and charges

The Trump administration launched a sweeping anti-fraud operation on Monday targeting pandemic-era small business loans, with more than 80 individuals charged and demand letters set to go out across the United States, spectrumlocalnews.com reports.

The Small Business Administration (SBA) began sending 30-day demand letters on Tuesday to borrowers in Kansas and Missouri suspected of defrauding pandemic-era Paycheck Protection Program (PPP) and Economic Injury Disaster (EID) loan schemes. The initiative, named Operation No Doze and led by the SBA inspector general's office, instructs recipients to return funds or face legal action.

"To anyone looking to defraud the state of Missouri, we're putting you on notice," Republican Missouri Governor Mike Kehoe said at an event in Kansas City. "We will find you, we will prosecute you, and you will pay."

Kehoe was joined by Vice President JD Vance, Attorney General Todd Blanche, FBI Director Kash Patel and SBA Administrator Kelly Loeffler.

$200 billion in stolen pandemic funds

According to Loeffler, the SBA disbursed $1.2 trillion in PPP and EID loans during the COVID-19 pandemic, of which an estimated $200 billion was stolen. As part of a related initiative called Operation Heartland Surge, the SBA has suspended 870,000 borrowers linked to an estimated $39 billion in taxpayer funds. The suspensions bar those individuals from accessing small business loans and federal contracting programmes.

Loeffler said the SBA has also referred $22 billion in fraudulent loans to the US Treasury for collections.

"If you stole from the Paycheck Protection Program, if you created fake companies and lied about your employees, we know who you are," she said. "We will claw back the money and, where warranted, we will refer you to law enforcement so that you can face the jail time you deserve."

More than 80 charged by DOJ

Attorney General Blanche announced Monday that the Department of Justice had charged more than 80 individuals in connection with COVID-era loan fraud totalling approximately $245 million. Many of the defendants had fabricated businesses, stolen identities and submitted false payroll information, he said.

"Pandemic loan relief was meant to keep American small businesses alive during government lockdowns, not line the pockets of fraudsters," Blanche said.

Part of broader White House anti-fraud push

Monday's action is the latest development in an anti-fraud campaign President Donald Trump announced earlier this year, appointing Vance to lead a dedicated task force. Last month, the White House estimated the task force had uncovered nearly $230 billion in fraud and halted approximately $56 billion in fraudulent payments from federal programmes, including Medicaid and supplemental nutrition assistance.

Vance said the 870,000 individuals barred from federal loan applications were flagged not only for confirmed SBA fraud but also because they were "tagged as having a high likelihood of committing fraud for other actions," though he offered no further specifics. He added that a review process would be available for those who believe they were wrongfully flagged.

The vice president also urged Congress to pass legislation that would extend the task force's mandate beyond the current administration.

"I don't want them checking the clock," Vance said of would-be fraudsters. "I want them to know that whoever's in charge of the federal government, they're going to go after fraud as zealously as President Donald J. Trump has."

The demand letters are expected to roll out nationally in the coming weeks.

Source: Google News MT — Crime (en)