Federal prosecutors are mounting a broad search for fraud in emergency lending programs designed to assist businesses battered by the coronavirus crisis, a top Justice Department official said yesterday, the Wall Street Journal reported. The Justice Department “has a lot of leads and there are multiple ongoing investigations of individuals and small businesses,” Assistant Attorney General Brian A. Benczkowski said. Prosecutors also will apply scrutiny to the activities of banks, which are charged with disbursing the funds in some of the programs, he added. The $660 billion Paycheck Protection Program is getting the most attention now because it is rushing loans out quickly to reach small businesses in dire need of liquidity. Prosecutors also plan to look for problems in other areas, such as loan programs managed by the Federal Reserve that provide loans or other forms of credit support and are partially backstopped by Treasury Department funding, Benczkowski said. A federal criminal complaint unsealed Tuesday in Rhode Island has many of the hallmarks of fraud that prosecutors thought they would see, Benczkowski said. In that case, two men are accused of claiming to have dozens of employees to get PPP loans when in fact they had no workers.
