Main Street Monday – SBA Inspector General Recovers $29 Billion in Pandemic Fraud

April 24, 2023

Delaney Sexton
Contributing Editor

Main Street Monday – SBA Inspector General Recovers $29 Billion in Pandemic Fraud

“My office knew from the onset of pandemic relief that SBA would face a delicate balancing act of preventing wide-spread fraud while ensuring timely disbursement of relief funds to Americans in immediate need of assistance,” says Inspector General Hannibal Ware in his testimony. “This was why we issued three reports prior to the first PPP loan or EIDL being disbursed. Even with these early warnings, SBA’s internal control challenges engendered the biggest fraud in a generation.”

The House Subcommittee on Oversight, Investigations, and Regulations held a hearing with the SBA Inspector General Hannibal Ware. They discussed the Inspector General’s investigations of SBA’s relief programs and issues with ongoing fraud.

Among the positive aspects brought up, $29 billion of the $82.7 billion that had been flagged for potential fraud across the programs has been recovered thanks to investigative efforts. Additionally, Inspector General Ware testified that the OIG’s oversight of the Paycheck Protection Program and EIDL program has led to 860 indictments, 687 arrests, and 486 convictions.

When asked about the SBA formally ending collections on defaulted PPP loans with outstanding balances of $100,000 or less, Inspector General Ware states, “I believe it sends a detrimental message for any future emergency programs, or any programs period across the government.” He responded similarly after Subcommittee Chairman Van Duyne asked about ending COVID EIDL collections on loans under $100,000. Inspector General Ware said that his disagreement with this is known both publicly and internally.

“The nation can depend on OIG to provide independent, objective, and timely oversight of SBA,” says Inspector General Ware. “I am confident SBA leaders are willing partners in ensuring their programs have integrity and meet the needs of the nation’s small businesses. OIG will shine the light of transparency on areas of concern and will be the independent and objective voice in our service as a valued change agent.”

Sources:
Inspector General Hannibal Ware Testimony
House Committee Press Release