Fraudsters bilked $70 million from US business aid plan

WASHINGTON: Scammers have stolen $70 million from a program supporting US businesses hurt by the coronavirus downturn, leading to dozens of charges and more to come, the Justice Department said on Thursday.

Brian C. Rabbitt, an acting assistant attorney general for the criminal division, told reporters 57 people had been charged with attempting - successfully in many cases - to get hold of more than $175 million from the Paycheck Protection Program (PPP).

Only some of that amount was actually taken, however, and the government has recovered about $30 million.

"The amount of fraud that we've uncovered to date and that we've prosecuted to date is significant," Rabbitt said.

"Given what we've seen so far, we believe that there is an additional set of fraudulent activity out there that we intend to continue pursuing."

The cases occurred across the United States, with the largest being for the alleged theft of $24 million, Rabbitt said. He added that the scams break into two categories: those perpetrated by individuals or small groups who create fraudulent businesses, and those done by organized criminal rings.

The PPP is part of the $2.2 trillion CARES Act rescue package Congress passed in March to blunt the economic fallout from the Covid-19 pandemic. Business shutdowns to stop the virus's spread have led to tens of millions of layoffs since, although the PPP and other provisions have been credited with spurring some rehiring, keeping businesses afloat and helping sectors of the economy recover more quickly.

The PPP finished in early August after making more than 5.2 million loans totaling upwards of $525 billion, according to the Small Business Administration. Controversy arose after the program's rollout amid claims that large businesses had inappropriately applied for funds, and prosecutors have also announced a number of fraud indictments.