B2B Payments

DOJ Finds Evidence Of PPP Loan Fraud

Department of Justice

Amid rising criticism over the loan effort, the Department Of Justice has reportedly discovered potential fraud among companies seeking relief with the Paycheck Protection Program (PPP). Assistant Attorney General Brian Benczkowski said prosecutors have reached out to 15 to 20 of the biggest loan processors and the Small Business Administration (SBA), Bloomberg reported.

Benczkowski said per the report, “Whenever there’s a trillion dollars out on the street that quickly, the fraudsters are going to come out of the woodwork in an attempt to get access to that money.” The probe has surfaced multiple warning signs in information prosecutors have looked at during the last week. Problems were reportedly found in applications that received the green light and those that did not.

The work of the Department of Justice to look into fraudulent use of coronavirus assistance is taking from the model that its healthcare fraud strike force utilized. That team has been utilizing data analytics for over 10 years to find criminal activities linked to Medicare in addition to other federal programs. Prosecutors decide whom to looking into by watching for rises in Medicare billing in particular regions.

Even so, blatant exhibits of fraud or actions that are legally questionable haven’t come to light publicly. To issue the loans, financial institutions were provided with broad discretion, and the effort’s guidelines were not written firmly.

But, as previously reported, companies that took in Paycheck Protection Program loans could encounter probes if they don’t meet the criteria for coronavirus relief, U.S. Treasury Secretary Steven Mnuchin said in April.

Some of the larger companies receiving loans qualified during the self-certification step of the PPP process but may not in fact, need the money to stay on an even keel over the coronavirus pandemic per Mnuchin.

The PPP makes companies certify that “current economic uncertainty makes this loan request necessary to support the ongoing operations of the applicant.”

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NEW PYMNTS STUDY: ACCELERATING THE REAL-TIME PAYMENTS DEMAND CURVE – NOVEMBER 2020

About: Accelerating The Real-Time Payments Demand Curve:What Banks Need To Know About What Consumers Want And Need, PYMNTS  examines consumers’ understanding of real-time payments and the methods they use for different types of payments. The report explores consumers’ interest in real-time payments and their willingness to switch to financial institutions that offer such capabilities.

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