Federal authorities accused 57 people of stealing $175 million from a program designed to help small businesses survive the pandemic freeze, officials said Thursday, adding that they were investigating hundreds of other cases of suspected fraud.
Officials said they had identified 500 people who may have defrauded the $660 billion Wage Earner Protection Program (WEPP) and that in many cases criminal networks were collaborating to steal program funds.
Officials also stated that the Justice Department, together with other agencies, will concentrate more on organized criminal crimes.
“The involvement of these rings is not surprising, but for us here at the department it is particularly troubling. We will be focusing on these types of cases in the future,” said Assistant Attorney General Brian Rabbitt at a press conference.
Officials said they believed fraud in the program was “substantial,” but refused to estimate how much of the funds approved by Congress as part of a $3 trillion pandemic rescue plan had been stolen.
A panel set up by congress last week said it had discovered tens of thousands of the program’s 5.2 million loans that could have been stolen, which in fact amounted to billions of dollars of taxpayer money.
This week, JPMorgan Chase & Co., which has issued nearly $30 billion in P3 loans, said it was cooperating with law enforcement after identifying cases of clients who had “misused” the funds.
Senator Marco Rubio, who happens to be the chairman of the Senate’s Small Business Committee, wrote to JPMorgan CEO Jamie Dimon on Thursday, demanded to know in details about the potential fraud and what the bank is doing to curb it.
Law enforcement officials have been working with lenders to identify problem loans, and Thursday said they are using state-of-the-art data analysis technology, which they perfected in business and health care fraud surveys to identify early warning signs.
“You can’t hide from these digital and paper trails,” James Lee, head of criminal investigation for the Internal Revenue Service, warned at the scammers’ meeting.