Federal regulators, including the Office of the Comptroller of the Currency and the DOJ, have issued alerts. They fully expect that fraudsters and scam artists will try to dip into the $2 trillion Coronavirus relief package that Congress just passed. Neil Barofsky, who served as Inspector General when the Bush Administration passed the much smaller TARP relief bill in 2008, estimates that up to $200 billion could be lost to fraud. The OCC has already seen losses due to “loan stacking,” the practice of businesses applying for multiple loans under the Paycheck Protection Program, and then keeping the proceeds from more than one successful application.
Congress designed the Paycheck Protection Program to disperse funds swiftly to small businesses through banks. While it is important to get funds to small businesses promptly, moving fast has serious drawbacks. There will not be enough time to vet applications carefully to ensure that each applicant meets the eligibility requirements, and local bankers may be more focused on transferring the funds than policing the program requirements. This creates a perfect storm for fraud, waste, and abuse. Billions of dollars will probably go out the door to unqualified applicants. Some of this will happen due to honest mistakes and negligence, but a significant portion of this will be lost to fraud. Unscrupulous people will easily recognize the weaknesses in this program, and they will exploit it.
Attorney General William Barr recognizes this, and, in March 16, 2020, a memo urged his Department to be vigilant,” The pandemic is dangerous enough without wrongdoers seeking to profit from public panic and this sort of conduct cannot be tolerated. Every U.S. Attorney’s Office is thus hereby directed to prioritize the detection, investigation, and prosecution of all criminal conduct related to the current pandemic.”
The Government cannot protect against fraud without help from honest whistleblowers, especially in this environment, and there are several laws that may allow a whistleblower to recover a reward if he or she helps the Government to recoup illegal gains from fraud. The False Claims Act is the Government’s primary tool to combat fraud, but other laws, including the Dodd-Frank Act may also come into play.
Please call the lawyers at Sanford Heisler Sharp. Our lawyers can help you and the Government put a stop to this.
Source: https://www.fastcompany.com/90492540/paycheck-protection-program-bank-regulators-want-to-talk-about-fraud-identification