Lawmakers scramble to recoup billions in fraudulent pandemic loans

WASHINGTON (NEXSTAR) — Capitol Hill lawmakers are stepping up efforts to buy back billions in fraudulent small business loans.

The Small Business Administration says tens of thousands of fraudulent loans have been taken out during the pandemic. Kansas Democratic Rep. Sharice Davids said there were multiple casualties in her district alone.

“We have seen a number of people who have had their identities stolen. We’ve seen fraudulent actors take out loans for businesses that didn’t exist,” Davids said.

She says two bills expected to pass as early as this week would give the Justice Department more time — up to a decade — to prosecute fraudsters.

It’s important “so that innocent people don’t get left with the bag,” Davids said.

The Small Business Administration says the pandemic has led to unprecedented levels of fraud, including about $4.6 billion in potentially fraudulent PPP loans.

Republican Missouri Sen. Josh Hawley said he’s eager for the Senate to act next, but blames Democrats for flimsy rules he says have allowed fraud to spread.

“There are very few checks on that money, how it was spent, or watchdogs. I think it’s time to get serious about it. I’ve introduced legislation many times,” Hawley said.

The original loan rules were approved by Congress at the height of the pandemic with overwhelming bipartisan support.

Last year, the Department of Justice launched the COVID-19 Fraud Enforcement Task Force.

Since then, the group has recouped hundreds of millions of dollars.