The Small Business Administration has referred 562,000 suspected fraudulent loans worth more than $22.2 billion to the Treasury Department for collections, marking the largest single action in an ongoing push to recover pandemic-era losses.
The loans, largely from the Paycheck Protection Program and the COVID Economic Injury Disaster loan program, were flagged during the Biden administration but never forwarded to Treasury for recovery. SBA Administrator Kelly Loeffler said the agency is now correcting that.
“From Day One, the Trump SBA has worked tirelessly to crack down on billions in pandemic-era fraud that the Biden Administration forgave or ignored,” Loeffler said in a statement. “After extensive review, and with the strong support of the White House Anti-Fraud Task Force, we are taking our most decisive action yet.”
The SBA also referred the borrowers to the Justice Department. None of the 560,000 accounts had been required to repay the $22.2 billion owed, and fewer than 1,000 were under investigation by the SBA’s Inspector General at the time of referral. The agency is legally required to send delinquent debts to Treasury.
The referrals stem from the White House Task Force to Eliminate Fraud, led by Vice President JD Vance and FTC Chair Andrew Ferguson. “Over $22 billion. We mean business. If you commit fraud, we will find you,” a senior White House official said.
Vance’s task force has identified more than one million suspicious PPP loans from research conducted on its first day. The administration estimates that of the $1.2 trillion in PPP and EIDL loans approved between 2020 and 2021, at least $200 billion is fraudulent.
The SBA has introduced new fraud controls including citizenship and birth date verification, and launched state-by-state investigations into suspected fraudulent borrowers. The agency has already suspended nearly 112,000 borrowers in California and Minnesota suspected of obtaining fraudulent loans totaling $86 billion.