Members of the House Small Business Committee heard expert testimony on Sept. 27 on a range of private sector solutions that the government could use to track down perpetrators of fraud against Small Business Administration (SBA) loan and relief programs during the coronavirus pandemic.
The hearing came after the SBA’s Office of Inspector General (OIG) released a report earlier this year finding that the COVID-19 Economic Injury Disaster Loan (EIDL) and Paycheck Protection Program (PPP) were rife with fraud totaling upwards of $200 billion.
“In the private sector, if there was an accounting hole of this magnitude, the business owner would do all he could to get this his receivable back into the bank account,” said Rep. Roger Williams, R-Texas.” This committee is working to find creative solutions to do just that and recoup the stolen pandemic funds for the taxpayers.”
One of the underlying issues that the Federal government faces when it comes to finding fraudsters is that it would take “more than 100 years of casework to go through to properly investigate all the loans that have been tagged as fraudulent,” Rep. Williams said.
Some solutions that could be used by the government featured a mix of trained professionals and data-sifting systems that can help locate perpetrators of frauds, according to Richard Breeden, chairmen of Breeden Capital Management, LLC.
“But the most effective tool is an experienced person sitting looking at the analytics and deciding that there’s a problem that needs greater follow up,” Breeden said. “So big data can do a lot of things, but it isn’t going to haul crooks in to identify and have someone go after them. So, it’s a mix of system and trained people.”
Other witnesses suggested more interagency collaboration to hammer away at the mountain of fraudulent claims.
“We must find a better way to recover stolen funds on the backend,” Rep. Williams said. “There will always be fraudsters and criminals looking to take advantage of any government program that is giving out money, but we must have the ability to catch these bad actors and bring them to justice so they will not be able to continue defrauding the American people.”
