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Senior Director of Strategic Alliances
LexisNexis Risk Solutions - Government

Fresh off of Fraud Of The Day revealing the fraud trends for 2023, a U.S. government watchdog has issued a “deeply disturbing” fraud alert over the widespread use of “questionable” Social Security numbers (SSNs) to get pandemic loans. Is there any other kind of fraud alert but a “deeply disturbing” one? The Pandemic Response Accountability Committee (PRAC) found that 69,323 potentially fraudulent SSNs were used to obtain $5.4 billion from the Paycheck Protection Program (PPP) and the COVID-19 Economic Injury Disaster Loan (EIDL) program. Deeply disturbing indeed. This bares the question, what do they mean by “potentially fraudulent?”

PRAC began its analysis by examining more than 33 million applications tied to the Economic Injury Disaster Loan program and Paycheck Protection Program. In a review of more than 33 million PPP and EIDL applications, the committee uncovered 221,427 potentially invalid SSNs. PRAC then requested verification information for these SSNs. Specifically, they asked the SSA four questions:

  • Is the SSN valid?
  • Does the name associated with the SSN on the loan match SSA records?
  • Does the date of birth associated with the SSN on the loan match SSA records?
  • Is the SSN used on the loan associated with a deceased individual?

Probably should have asked these questions before approving the loans?

Of those 221,427 SSNs investigated, it was found that 69,323 questionable SSNs made it through the system and were used in connection with 99,180 successful loan applications, amounting to $5.4 billion that was paid out between April 2020 and October 2022.

A further 175,768 of the red-flag SSNs were used in loan applications that weren’t paid out. However, PRAC cautioned that these SSNs “could be used in a future attempt to obtain benefits from other government programs, and therefore warrant further scrutiny.” Good idea. I bet they will get right on that.

Just like they will get right on to the deceased. Many of the SSNs in the original selection were associated with deceased individuals. PRAC did not include those SSNs and the associated loans in the overall analysis because they are still trying to determine whether those folks were alive when the application was submitted.

Great job by the Pandemic Response Accountability Committee. Keep on asking good questions!

Today’s Fraud of The Day is based on “Watchdog Sounds Alarm On $5.4 Billion Of Potentially Fraudulent Pandemic Loans” published by Forbes Magazine on February 1, 2023

The Pandemic Response Accountability Committee—or PRAC—has identified billions of dollars in potential fraud and identity theft related to pandemic relief loan programs.

The PRAC report, issued this week, identified 69,323 questionable Social Security Numbers used to obtain $5.4 billion from the Small Business Administration’s EIDL and PPP.

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