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Senior Director of Strategic Alliances
LexisNexis Risk Solutions - Government

Over the course of the COVID-19 pandemic, the Small Business Administration disbursed approximately $1.2 trillion of COVID-19 Economic Injury Disaster Loan (EIDL) and Paycheck Protection Program (PPP) funds. In the rush to swiftly disburse the money, SBA loosened its internal controls. In doing so, the agency removed the controls necessary to prevent fraudsters from easily gaining access to these programs. In what was now a “pay and chase” environment, an an overwhelming number of fraudsters surged the programs.

A new report from the Small Business Administration’s Office of Inspector General reveals an astonishing 17% of COVID-19 funds vanished to fraud — an estimated total of $200 billion. The SBA says it estimates there are more than 90,000 fraudulent claims involved in making these numbers so high. Experts say crooks blatantly created fake businesses or lied about their numbers of employees to get access to more free cash — because it was so simple to fleece the taxpayer. Haywood Talcove of LexisNexis Risk Solutions told The Post “The fraud was so easy to commit. All of the information was self-reported and none of it was verified or checked.”

Wheels of justice are slow to grind but eventually they get the job done. Dozens of fraudsters have already been prosecuted, including Donald Finley. Finley was a businessman from New York City and owner of the now-shuttered Manhattan theme restaurant Jekyll & Hyde. Aptly named for a fraudster. Between March 2020 and March 2021, Finley submitted fake applications for nearly 30 small business loans receiving approximately $3.2 million from the Paycheck Protection Program and Economic Injury Disaster Loan Program. Instead of saving people’s jobs like the loans were set up for, Finley purchased a multi-million-dollar ocean front home in Nantucket. In 2022, Finley closed Jekyll & Hyde but not because he was too busy living the highlife on fraudulent PPP funds. Finley owed $9 million to creditors and filed for bankruptcy. His pandemic crimes didn’t go unnoticed however and on May 25, 2023, Finley pleaded guilty to disaster relief fraud.

Great job by the COVID-19 Fraud Enforcement Task Force.

Today’s Fraud of The Day is based on article “PPP fraud is ‘worst in history’: $200B stolen and blown on Lamborghinis, beach houses and bling” published by the NY Post on July 14, 2023

Tens of thousands of fraudsters splurged on Lamborghinis, vacation homes, private jet flights and Cartier jewelry by fleecing the PPP loan system in a $200 billion heist — and did it because the COVID loan scheme was so easy to milk.

Approximately $1.2 trillion was rushed through Congress in 2020 and 2021 in COVID bailout cash for businesses and spent on the Economic Injury Disaster Loan Program (EIDLP) and the Paycheck Protection Program (PPP) schemes.

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