PPP loaned $523 billion to help save small businesses. Today much of the news re: PPP concerns fraud allegations, involving doctored payroll, fake tax returns, fraudulent bank statements, etc.
A NY Post headline read: "CA man convicted of fraud, charged with trying to steal $22M from PPP loans." One estimate determined that $1 billion went to borrowers with recent felony convictions (a violation of the PPP rules).
With the negative headlines, it is no surprise that the Small Business Administration intends to audit all loans over $2 million.
Expect increased scrutiny by the SBA on both borrowers and lenders that participated in PPP. Lenders likely won't be off the hook even though the SBA allowed for lower borrowing requirements.
Please reach out to discuss how we can assist you and your clients with the audit process.
Four months after the federal government’s signature coronavirus relief program for small businesses expired, investigators and lawmakers have only scratched the surface of schemes that illicitly tapped its forgivable loans. The program’s hastily drafted and frequently revised rules, its removal of normal lending guardrails and governmental pressure to swiftly approve applications created the ideal conditions for thievery to thrive. So far, the Justice Department has brought criminal charges against more than 80 people accused of stealing at least $127 million from the relief program, but there’s far more to uncover. The House Select Subcommittee on the Coronavirus Crisis said it had identified more than $4 billion in potentially improper loans, and some bankers believe the total will be much higher.
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