The Justice Department has made at least 41 criminal complaints in federal court against nearly 60 people, who collectively took $62 million from the Paycheck Protection Program by using what law enforcement officials said were forged documents, stolen identities and false certifications, the New York Times reported. They are just “the smallest, tiniest piece of the tip of the iceberg,” said Hannibal Ware, the inspector general of the Small Business Administration, which led the program. But with their ostentatious spending and clearly faked records, those examples have also been the easiest to spot. The Paycheck Protection Program, a centerpiece of the CARES Act, poured $525 billion into the economy in just four months before coming to an end. More than five million businesses received loans, which could be forgiven if used for payroll and certain other expenses. Now, that hastily created program in response to the initial financial shock of the COVID-19 pandemic is entering its next messy stage, one that lenders and government officials expect to take years: the hunt to recapture illicitly obtained cash. The challenge facing scores of state and federal agencies is enormous. The Small Business Administration’s fraud hotline, which received fewer than 800 calls last year, has already had 42,000 reports about coronavirus-linked graft. But many of the cases investigators ultimately pursue will not have telltale clues like expensive watches and Italian sports cars bought by people who said their small businesses were in need of help. Future cases will be more thorny, involving owners who tried to exploit gray areas in the program’s rules or the desperation of their employees. Under the initial rules, borrowers who wanted the loans forgiven had to spend most of the money within eight weeks. Those limits frustrated many owners, and some appear to have tried to quietly break the rules, according to the workers, who asked not to be identified to protect their livelihoods.
