US suspends 870,000 borrowers over suspected pandemic loan fraud

US Vice President JD Vance said the Small Business Administration had suspended nearly 870,000 borrowers over suspected pandemic loan fraud involving an estimated $39 billion in taxpayer money, while officials pledged to pursue fraudulent borrowers and prevent future losses.

Washington: US Vice President JD Vance announced that the Small Business Administration had suspended nearly 870,000 borrowers over suspected pandemic loan fraud, as officials linked the accounts to an estimated $39 billion in taxpayer money.

Speaking at a fraud task force event in Missouri, Vance urged congressional Democrats to support the administration’s efforts. SBA Administrator Kelly Loeffler said the suspensions covered borrowers across 45 states and territories.

---

The action involved the Paycheck Protection Program and Economic Injury Disaster Loan programme. The figures presented concerned suspected fraudulent activity. They did not establish how many borrowers had been convicted or how much money had been recovered.

Asked directly for those figures, Vance did not provide them in the remarks recorded in the pool report. He instead pointed to a process allowing borrowers to challenge their designation.

“We certainly appreciate that some people, you know, mistakes sometimes happen,” he said.

Vance said blocking people previously identified as having defrauded the government from obtaining further assistance was a way to prevent future losses. He added that those who believed they had been wrongly flagged could appeal.

Loeffler promised to pursue borrowers who had used false information to obtain pandemic assistance.

“If you stole from the Paycheck Protection Program, if you created fake companies and lied about your employees, we know who you are, we will claw back the money.”

Attorney General Todd Blanche said the administration was intensifying its response to the alleged misuse of funds.

“I flew in from Washington DC this morning for one reason. The American people were robbed and they deserve to know,” he said.

“For years, fraudsters got the message that Washington would look the other way. That era is over.”

FBI Director Kash Patel said five people on a most-wanted fraudsters list had been captured in three months. He said he hoped to double that number by the end of the year.

SBA Inspector General Bill Kirk announced “Operation No Doze”, under which suspected SBA fraudsters in Kansas and Missouri would receive final 30-day demand letters.

Vance also said the task force was examining whether the Biden administration had been aware of PPP fraud. The supplied account included no findings establishing wrongdoing by former administration officials.

“It was an open secret,” Vance said, arguing that officials had known the programme was vulnerable to widespread abuse.

He acknowledged that some Democrats at the state level had helped the fraud effort. But he accused Democrats in Congress of obstructing it. The pool report included no response from Democrats to those allegations.

Vance said investigations also covered suspected Medicaid fraud. He argued that money diverted from the programme could deprive low-income Americans of access to medical care.

He called for a legislative framework that would allow the fraud effort to continue beyond the Trump administration. He said invitations had been extended to congressional Democrats to work with the administration.

“If you’re thinking about defrauding the American taxpayer, if you’re thinking about skimming off the top, if you’re thinking about taking a program that was meant for hungry children or for needy young mothers, don’t do it. Go and get a job instead.”