Senate minority report — Small Business COVID-19 Fraud: Three Years Later (November 2023)

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Small Business COVID-19 Fraud:
THREE YEARS LATER
State of Play
NOVEMBER 14, 2023
Ranking Member Ernst
Minority Report

1
CONTENTS
EXECUTIVE SUMMARY...................................................................................................2
Background: The Pandemic Landscape........................................................................... 3
Summary of COVID-19 Pandemic Programs at SBA...............................................................................................3
Investigation of Pandemic Fraud...................................................................................................................................5
Fraud at Fintechs ...............................................................................................................................................................6
Part 1: The SBA’s False Narrative Discounts the Full Extent of Fraud.......................... 7
The SBA Publicly Understates the Amount of Fraud ..............................................................................................7
The SBA’s Understatement of Restaurant Revitalization Fund (RRF) 
and Shuttered Venue Operators Grant (SVOG) Fraud Rates.................................................................................7
The SBA Overstated the Number of Referrals to the SBA OIG.............................................................................9
The SBA states it has adopted a “Tone at The Top” for Fraud Risk Management 
though the SBA’s Actions Indicate Otherwise .........................................................................................................10
The SBA should do more to leverage data analytics to prevent and detect fraud.........................................10
Part 2: Efforts to Recover Funds.......................................................................................11
Overview of Recovery Efforts.........................................................................................................................................11
The SBA’s Faulty Rationale and Unlawful Decision to 
End Collections on Loans Under $100,000.............................................................................................................. 12
Improvements to the SBA’s Fraud Risk Management Would Assist in Recovering Funds.........................13
Part 3: Opportunities for Future Legislation and Policy Changes...............................14
Strengthening Taxpayer Recoveries Act.................................................................................................................... 14
Administrative False Claims Act of 2023.................................................................................................................. 15
GAO open matters for Congressional Consideration............................................................................................ 15
CONCLUSION.................................................................................................................... 16
Appendix 1. Oversight Work Conducted.......................................................................... 17

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EXECUTIVE SUMMARY
From funding Lamborghinis, luxury vacations, extravagant jewelry, and even an 
alpaca farm, fraudsters abused the U.S. Small Business Administration’s (SBA) 
COVID-19 relief programs to the tune of more than $200 billion in fraud—all 
on the dime of hardworking American taxpayers. While the SBA has claimed 
a zero-tolerance policy when it comes to fraud, its behavior demonstrates 
nothing of the sort.1, 2 The SBA has discounted the full extent of fraud and 
instead tried to cast doubt on the legitimacy of fraud estimates made by expert 
investigators in its own Office of Inspector General (OIG). In addition, there 
are certain federal entities working to restrict the ability of law enforcement 
agencies to address fraud. These efforts, coupled with the SBA’s lackadaisical 
approach to rampant fraud in its programs, have hampered recovery efforts. 
Flagrant fraud within government programs, especially when it is allowed to 
go unpunished, hurts taxpayers and harms small businesses most. The SBA 
OIG recently reported it has over 100,000 actionable investigative leads. A 
temporary surge of federal law enforcement investigators is needed to help 
meet this demand. Congress must restore the abilities of the Special Inspector 
General for Pandemic Recovery (SIGPR) to help tackle these cases and 
reverse the SBA’s decision to end collections on loans under $100,000 to hold 
criminals responsible. Accordingly, the passage of S. 2664 the Strengthening 
Taxpayer Recoveries Act, S. 659, the Administrative False Claims Act, and 
the implementation of four key Government Accountability Office (GAO) 
recommendations would augment the capacity of investigators to recover 
taxpayer funds, ensure loans are paid back, and strengthen federal government 
controls when disbursing funding in the future.  
1	  “Ernst Says SBA Must Be Held Accountable for Pandemic Relief Funds That Were Misspent.” The Ripon Society, April 21, 2023.
2	  “Hearing: Nomination of Dilawar Syed to be Deputy Administrator of the Small Business Administration.” U.S. Senate Committee on Small 
Business & Entrepreneurship, March 8, 2023.

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Background: The Pandemic Landscape
Summary of COVID-19 Pandemic Programs at SBA
As public health authorities around the country issued lockdown orders at the onset of the COVID-19 pandemic 
in March 2020, this prevented millions of small businesses from operating, and sent the unemployment rate over 
13 percent.3 To help prevent further economic devastation, Congress established relief programs to help small 
businesses remain solvent and retain their workers through the crisis. 
The Paycheck Protection Program (PPP), the largest of the SBA relief programs, provided forgivable loans to small 
businesses, non-profits, and self-employed workers to cover payroll costs, rent, interest, and utilities. These loans 
were designed to tide over small businesses that faced severe economic challenges or were unable to operate due 
to lockdown orders. When the SBA stopped accepting new PPP applications on May 31, 2021, it had approved over 
11.8 million PPP loans totaling nearly $800 billion.4 The SBA’s COVID-19 Economic Injury Disaster Loans (EIDL) 
program provided economic relief to small businesses and nonprofit organizations. Congress authorized the SBA 
to make low interest, fixed-rate, long-term loans to provide borrowers with working capital to meet ordinary and 
necessary operating expenses, as well as advance grants that did not require repayment.5 
While the PPP and EIDL programs constituted the vast majority of pandemic relief funds, the American Rescue 
Plan Act, a bill passed along partisan lines, established the Restaurant Revitalization Fund (RRF) and expanded other 
SBA pandemic relief lending programs, including the Shuttered Venue Operators Grant (SVOG).6 Through the RRF, 
the SBA provided grants of up to $5 million to restaurants and similar businesses that experienced revenue losses 
related to the response to the COVID-19 pandemic.7 The SVOG program provided grants for live venue operators, 
theatrical producers, and similar businesses affected by COVID-19.8 
Fraudsters took advantage of SBA’s pandemic lending and grant programs to steal taxpayer dollars for their own 
enrichment. What’s more, these fraudulently obtained funds took resources away from legitimate small businesses 
struggling to survive the lockdowns. In July 2023, the SBA OIG reported that of the $1.2 trillion of EIDL and PPP 
funds, over $200 billion (17% of all funds) were disbursed to potential fraudsters.9 
3	  Smith, Sean M., Roxanna Edwards, and Hao C. Duong. “Unemployment Rises in 2020, as the Country Battles the COVID-19 Pandemic.” 
Monthly Labor Review, U.S. Bureau of Labor Statistics, June 2021. 
4	  Dilger, Robert Jay. “SBA Paycheck Protection Program (PPP) Loan Forgiveness: In Brief.” Congressional Research Service, October 6, 2021.
5	  Lindsay, Bruce R. “SBA COVID-19 EIDL Financial Relief: Policy Options and Considerations.” Congressional Research Service, April 18, 2023.
6	  P.L. 117-2
7	  Levin, Adam G. “SBA Restaurant Revitalization Fund Grants.” Congressional Research Service, August 15, 2022. 
8	  Dilger, Robert Jay, and Adam G. Levin. “SBA Shuttered Venue Operators Grant Program (SVOG).” Congressional Research Service, July 5, 
2022. 
9	  “Covid-19 Pandemic EIDL and PPP Loan Fraud Landscape.” Report 23-09, U.S. Small Business Administration, Office of Inspector General, 
June 27, 2023. 

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There have been too many high-profile examples of egregious or bizarre federal cases of PPP and EIDL fraud to 
exhaustively list. Among the notable cases are:
1.	
The fintech Kabbage loaned over $7 million to fake farms including “Deely Nuts” and “Beefy 
King.”10
2.	 Actor Austin St. John, who played the Red Power Ranger in the Mighty Morphin Power Rangers, 
was charged along with 19 others for fraudulently obtaining $3.5 million in PPP loans.11 
3.	 A man in Florida plead guilty to wire fraud and engaging in an illegal monetary transaction after 
using PPP loans to pay off his mortgage on his home and business property, purchase an 18 karat 
gold Rolex watch, as well as buy a Jaguar CKE Roadster sports car.12
4.	 Former NFL player Joshua Bellamy used fraudulent PPP dollars on a stay at the Seminole Hard 
Rock Hotel and Casino and to purchase jewelry.13
5.	 A man in Florida plead guilty to wire fraud after he used $318,000 of the $3.9 million PPP loan he 
received to purchase a Lamborghini.14
6.	 Eight members of the “Insane Crip Gang,” a subset of the national “Crips” street gang, used PPP 
loans to buy weapons which were ultimately used in various robberies, kidnappings, and murders.15  
7.	
Actress Ion Overman, of “Madea Goes to Jail,” was charged—along with 21 others—for a PPP fraud 
scheme totaling $3,899,377.16
8.	 Former Olympic speed skater Allison Baver used parts of her $10 million fraudulent PPP loan to 
pay HOA fees and finance Lord of the Rings star Elijah Wood’s movie about Ted Bundy.17, 18, 19
9.	 Disgraced fintech company Womply claimed to have Artificial Intelligence systems able to scan 
people’s faces to match government ID photos, but were tricked by scam artists using barbie 
dolls, masks, and mannequin photos to obtain fraudulent PPP loans.20
10.	 Drug trafficker Ashford Richardson, who spent five years and three months in prison for 
conspiring to distribute multiple kilograms of cocaine, is back in prison after fraudulently obtaining 
over $50,000 in EIDL and PPP loans while on supervised release.21
10	  Willis, Derek, and Lydia DePillis. “Hundreds of PPP Loans Went to Fake Farms in Absurd Places.” ProPublica, May 18, 2021. 
11	  “18 Arrested, Charged in East Texas Paycheck Protection Program-Related Fraud.” U.S. Attorney’s Office, Eastern District of Texas, May 18, 
2022. 
12	  “Jacksonville Man Pleads Guilty to COVID Relief Fraud and Money Laundering.” U.S. Attorney’s Office, Middle District of Florida, February 14, 
2023. 
13	  “Former NFL Player Sentenced to More than Three Years in Prison for Covid-19 Relief Fraud.” Office of Public Affairs, U.S. Department of 
Justice, December 10, 2021. 
14	  “Man Purchased Lamborghini After Receiving $3.9 Million in PPP Loans.” Office of Public Affairs, U.S. Department of Justice, February 10, 
2021.
15	  “Eight Crips Gang Members and Associates Indicted for Racketeering and Numerous Violent Crimes on Long Island.” U.S. Attorney’s Office, 
Eastern District of New York, April 13, 2023.
16	  “22 People Charged in Connection with a Multi-Million Dollar Paycheck Protection Program Fraud Scheme.” U.S. Attorney’s Office, Northern 
District of Georgia, February 1, 2022. 
17	  Carlisle, Nate. “Fox 13 Investigates: Utah Trial Starts for Olympian Who Received Pandemic Bailout.” FOX 13 News Utah (KSTU), June 26, 
2023.
18	  “Utah Woman Found Guilty of $10m Worth of PPP Loan Fraud.” United States Attorney’s Office, District of Utah, June 30, 2023.
19	  “Allison Baver Verdict: Former Olympic Speedskater Guilty on All Counts Related to $10m PPP Loan.” The Salt Lake Tribune, June 30, 2023.
20	 Kilander, Gustaf. “Scammers used doll faces to secure in COVID pandemic aid in PPP fraud.” The Independent, June 29, 2023. 
21	  “Drug Trafficker Returns to Prison for Committing PPP and Other Pandemic Relief Fraud While on Supervised Release.” U.S. Attorney’s Office, 
Northern District of Georgia, June 15, 2023. 

5
Investigation of Pandemic Fraud
The U.S. Department of Justice (DOJ) has charged over 3,000 defendants across the country with defrauding 
the SBA’s COVID programs.22 The SBA OIG has also made it a high priority to prosecute those who engaged in 
schemes to illegally obtain PPP or EIDL funds. Between March 2020 and September 2023, the SBA OIG reported 
1,180 indictments, 936 arrests, and 613 convictions related to PPP or EIDL fraud. As of September 2023, there are 
580 ongoing investigations into fraudulent practices in the PPP or EIDL programs.23 The SIGPR and the Pandemic 
Response Accountability Committee (PRAC) have also made significant strides in cracking down on abuse and 
fraud within these pandemic relief programs. For instance, in January 2023, the PRAC identified $5.4 billion in 
potentially fraudulent EIDL and PPP loans obtained using over 69,000 questionable Social Security numbers.24 
Within the PRAC, the Pandemic Analytics Center of Excellence (PACE) applies the latest advances in analytic and 
forensic technologies to help OIGs and law enforcement pursue data-driven pandemic relief fraud investigations. 
Investigative work has been crucial to recovering illegally obtained and improperly disbursed taxpayer dollars. 
The SIGPR and the PRAC have been essential in identifying and investigating cases of potential fraud within PPP, 
EIDL, and other pandemic relief programs. Congress established the SIGPR and the PRAC to safeguard Americans’ 
tax dollars within the relief and aid programs. Congress granted the SIGPR inspector general powers and authorities 
to audit and investigate loans made by the Secretary of the Treasury on behalf of any program established by 
the Coronavirus Aid, Relief, and Economic Security (CARES) Act.25 Congress also created the PRAC through the 
CARES Act, to support and coordinate independent oversight of pandemic relief spending while seeking out fraud, 
waste, abuse, and mismanagement.26 The SIGPR and the PRAC investigations have resulted in arrests, guilty pleas, 
sentencings, and imprisonments. Among the success stories of the SIGPR and the PRAC’s work are uncovering a 
$53 million PPP fraud scheme in North Texas, a more than $7 million fraud operation in Virginia, and a $2.6 million 
EIDL, PPP, and Main Street Lending Program (MSLP) fraud case in South Florida.27 These watchdogs have played—
and continue to play—a crucial role in identifying fraud perpetrated against American taxpayers through pandemic 
relief programs, as well as holding fraudsters accountable for stealing taxpayer dollars.
However, the SIGPR’s jurisdiction to investigate fraud within the SBA COVID-19 programs is contested. Amidst 
resistance from the U.S. Department of the Treasury to the SIGPR’s oversight of the SBA COVID-19 programs, the 
DOJ’s Office of Legal Counsel issued an opinion in which it claimed the SIGPR’s jurisdiction is narrowly limited to 
programs established under title IV, subtitle A of the CARES Act.28 In practice, this interpretation would preclude the 
SIGPR from investigating the Coronavirus Relief Fund, Payroll Support Program, and PPP, restricting the  SIGPR’s 
role in detecting fraud to the Treasury’s direct loans and the Federal Reserve’s lending programs.29 This dispute 
undermines the SIGPR’s critical work of detecting and responding to fraudulent abuse of taxpayer funds. In a 
quarterly report to Congress, Special Inspector General Brian Miller acknowledged that this work cannot continue 
unless Congress can, “pass legislation to clarify SIGPR’s mandate to provide oversight” of the SBA’s COVID-19 
programs.30
22	 “Justice Department Announces Results of Nationwide COVID-19 Fraud Enforcement Action.” Office of Public Affairs, U.S Department of 
Justice, August 23, 2023. 
23	 SBA OIG Congressional Update on file with author, October 2023. 
24	 “Fraud Alert: PRAC Identifies $5.4 Billion in Potentially Fraudulent Pandemic Loans Obtained Using Over 69,000 Questionable Social 
Security Numbers.” Pandemic Response Accountability Committee (PRAC).
25	“SIGPR Overview”  U.S. Special Investigator General for Pandemic Recovery, 2023.
26	 “About Us | Pandemic Oversight.” U.S. Special Investigator General for Pandemic Recovery, 2023.
27	 “Quarterly Report to the United States Congress.” Office of the Special Inspector General for Pandemic Recovery, April to June, 2023.
28	 “Authority of the Special Inspector General for Pandemic Recovery To Oversee Programs Established Under the CARES Act.” U.S. Department 
of Justice, Office of Legal Counsel, April 29, 2021.
29	 “SIGPR Quarterly Report to the United States Congress.” Office of the Special Inspector General for Pandemic Recovery, January to March, 
2021. 
30	 “SIGPR Quarterly Report to the United States Congress.” Office of the Special Inspector General for Pandemic Recovery, January to March, 
2021. 

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Fraud at Fintechs 
Financial technology (fintech) companies’ reckless lending practices are responsible for a significant portion of the 
fraud and misuse of taxpayer dollars within the SBA’s largest emergency pandemic lending programs: PPP and 
EIDL. James E. Clyburn (D-SC), when Chairman of the House Select Subcommittee on the Coronavirus Crisis, 
revealed in a December 2022 report that the SBA heavily delegated to fintech companies who enriched themselves 
with taxpayer-funded processing fees while failing to guard effectively against fraud risks:
The Select Subcommittee’s investigation found that fintechs were given extraordinary 
responsibility in administering the nation’s largest pandemic relief program, as certain 
SBA lenders heavily delegated applicant screening to companies that claimed to employ 
effective and innovative fraud control technology. However, many of these companies 
appear to have failed to stop obvious and preventable fraud, leading to the needless 
loss of taxpayer dollars. The Select Subcommittee’s investigation found that several 
fintechs, largely existing outside of the regulatory structure governing traditional financial 
institutions and with little to no oversight, took billions in fees from taxpayers while 
becoming easy targets for those who sought to defraud the PPP.31 
Womply and Blueacorn, two fintechs investigated by the Select Subcommittee, together facilitated about one third 
of PPP loans in 2021.32 These companies prioritized profit margins over responsible stewardship of taxpayer dollars 
during an unprecedented national economic crisis. The Select Committee investigation determined that the PPP 
“lacked sufficient incentives for fintechs to implement strong fraud prevention controls.”33 
Traditional lending institutions generally maintain established borrower relationships due to Know Your Customer 
and anti-money laundering requirements. Wide-ranging Bank Secrecy Act compliance programs also ensure 
strong underwriting standards. By contrast, fintechs lack the established relationships and oversight frameworks 
compelling formal anti-fraud procedures.34 Researchers at the University of Texas at Austin (UT Austin) found 
fintech-originated loans were 3.23 times as likely as traditionally-originated loans to have at least one indicator of 
misreporting, such as a business registry flag, a multiple loan flag, a high implied compensation flag, or reporting 
a higher number of jobs for EIDL advances than in a PPP application. According to the UT Austin researchers’ 
analysis, potential misreporting rates were in excess of 25% for 10 large fintech lenders.35 Fintechs enabled 
fraudsters and scammers to get a hold of billions in taxpayer funds, through limited oversight over their loans. 
Meanwhile, millions of struggling small businesses eligible for pandemic relief funds were left empty handed. 
31	  “Preparing for and Preventing the Next Public Health Emergency: Lessons Learned from the Coronavirus Crisis,” Select Subcommittee on 
the Coronavirus Crisis, December 2022.
32	 Id.
33	 Id. 
34	 Griffin, John, Samuel Kruger, and Prateek Mahajan. “Did Fintech Lenders Facilitate PPP Fraud?” The Journal of Finance, February 7, 2023. 
35	 Id. 

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Part 1: The SBA’s False Narrative Discounts the Full Extent of Fraud
The SBA Publicly Understates the Amount of Fraud 
In June 2023, the SBA OIG reported that the SBA likely disbursed more than $200 billion in potentially fraudulent 
EIDL and PPP funds.36 Rather than acknowledge the agency’s subpar performance, the SBA’s leadership accused 
its OIG of misleading the public. In response to the SBA OIG report, the SBA implausibly claimed only $36 billion of 
EIDL and PPP funds were likely obtained fraudulently.37, 38 The SBA’s fraud estimate is around 600% less than the 
SBA OIG’s estimate. The SBA alleges it conducted an “extensive analysis” to arrive at its $36 billion figure, but has 
failed to provide evidence to the Committee to support this claim.39, 40
In a July 2023 hearing of the House Committee on Small Business, the SBA OIG Inspector General Hannibal 
“Mike” Ware testified that every loan within the $200 billion figure meets the OIG’s threshold for opening an 
investigation, resources permitting.41 The SBA OIG’s work aligns with applicable quality control standards. On 
the other hand, the SBA’s fraud estimate relied on manual reviews that fall short of the standards followed by 
the Inspector General community. Moreover, the SBA does not have access to the same datasets and does not 
possess comparable expertise in assessing fraud or conducting law enforcement investigations. The House 
Committee on Small Business invited the SBA Administrator Isabella Casillas Guzman to the same hearing at 
which Inspector General Ware testified. Regrettably, Administrator Guzman declined the opportunity to defend 
the SBA’s bold claims, or the agency’s strategy of casting aspersions on its Inspector General’s estimates of 
rampant fraud within the SBA’s programs.42
The SBA’s Understatement of Restaurant Revitalization Fund (RRF) 
and Shuttered Venue Operators Grant (SVOG) Fraud Rates
In a June 2023 report, the SBA boasted both the RRF and SVOG programs had estimated fraud rates well below 1%, 
at 0.75% and 0.33% respectively. However, this internal SBA estimate based on the quantity of referrals to the SBA 
OIG is unreliable. The SBA’s failure to refer potential fraud to its OIG does not speak to the actual volume of fraud 
present. Instead, it is an indicator that the SBA internal controls for detecting fraud within these programs could 
use strengthening.
In fact, independent auditors found the SBA failed to comply with nearly all of the reporting requirements under 
the Payment Integrity Information Act of 2019 (PIIA).43, 44 The PIIA is a law requiring federal agencies to identify and 
review all programs and activities they administer that may be susceptible to significant improper payments. The 
audit report also noted the SBA’s risk assessment methodology did not consider certain identified risk factors for 
RRF and SVOG. 
Other reports also suggest the SBA may be undercounting fraud in the RRF. In June 2023, the GAO reported the 
SBA could take additional steps to identify and respond to fraudulent or ineligible RRF recipients. The SBA replied 
that RRF controls do not need to be assessed, and additional steps do not need to be taken to identify potential 
36	 “COVID-19 Pandemic EIDL and PPP Loan Fraud Landscape.” Report 23-09, Office of Inspector General, U.S. Small Business Administration, 
June 27, 2023.
37	 Id.
38	 “Protecting the Integrity of the Pandemic Relief Programs: SBA’s Actions to Prevent, Detect and Tackle Fraud.” U.S. Small Business 
Administration, June 2023.
39	 Id.
40	 “COVID-19 Pandemic EIDL and PPP Loan Fraud Landscape.” Report 23-09, Office of Inspector General, U.S. Small Business Administration, 
June 27, 2023.
41	  “Full Committee Hearing – “Stolen Taxpayer Funds: Reviewing the SBA and OIG Reports of Fraud in Pandemic Lending Programs.” U.S. 
House Committee on Small Business, July 13, 2023.
42	 Id.
43	 “Independent Auditors’ Report on SBA’s Fiscal Year 2022 Compliance with the Payment Integrity Information Act of 2019.” Report 23-07, 
Office of Inspector General, U.S. Small Business Administration, May 15, 2023. 
44	 P.L. 116-117

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fraud, because the SBA believes strong controls are in place that align with industry practices.45, 46 One month after 
the GAO report, the SBA OIG found the SBA approved 3,790 RRF applications—totaling $557 million—without 
verifying gross sales, a key fraud control designed to prevent ineligible entities from receiving awards. Many of the 
3,790 applications had indictors of potential fraud, and the SBA has still not reviewed 2,172 of these RRF awards, 
totaling $278.6 million.47 In a September 2023 report, the OIG found that over 20,000 RRF recipients, receiving 
approximately $3.5 billion, had not filed any of the required reports. The SBA OIG also identified that the SBA had 
not completed timely post award reviews.48 After 10 months, program officials reviewed only 88 awards, fewer than 
one percent of the 10,050 awards selected for review.49 For certain subcategories of the 88 completed reviews, 89% 
or 100% of awards went to ineligible recipients.50
Not only was the RRF replete with fraud, but the SBA acted unconstitutionally when disbursing funds as well. 
Various plaintiffs sued SBA in federal court alleging SBA’s use of race-based and sex-based preferences for the 
awarding of the RRF funds violated the Equal Protection Clause of the 14th Amendment. In each of these lawsuits, 
the SBA was found to be violating the Constitution.51
For SVOG, the SBA’s internal 0.33% fraud rate estimate is also not indicative of the actual amount of fraud in the 
program. The SBA removed internal controls for the program and its fraud risk monitoring needs improvement. The 
SBA OIG reported that the SBA switched to a risker payment method providing less protection against fraud. Of 10 
awards to organizations the OIG reviewed, all were unauthorized commitments without proper documentation and 
several had inadequate support for the grant amounts.52 In an October 2023 report, the SBA OIG found that the 
SBA made 47 SVOG awards to ineligible entities—23 percent of the awards sampled by the SBA OIG. Additionally, 
the SBA OIG found the SBA limited or eliminated certain verification procedures, such as obtaining tax transcripts, 
implemented a strict 4-hour review time for applications, and stopped the practice of validating certain matches 
to the U.S. Department of the Treasury’s Do Not Pay List. These changes weakened internal controls and allowed 
ineligible entities to receive SVOG grants.53 According to the GAO, the SBA could improve its ability to identify and 
address fraud among SVOG grantees. The SBA did not fully agree with this finding.54
45	 “2023 Annual Report: Additional Opportunities to Reduce Fragmentation, Overlap, and Duplication and Achieve Billions of Dollars in 
Financial Benefits.” GAO-23-106089, U.S. Government Accountability Office, June 14, 2023.
46	 “Restaurant Revitalization Fund: Opportunities Exist to Improve Oversight.” GAO-22-105442, U.S. Government Accountability Office, July 14, 
2022.
47	 “SBA’s Administrative Process to Address Potentially Fraudulent Restaurant Revitalization Fund Awards.” Report 23-10, Office of Inspector 
General, U.S. Small Business Administration, July 5, 2023.
48	 “SBA’s Oversight of Restaurant Revitalization Fund Recipients.” Report 23-15, Office of Inspector General, U.S. Small Business Administration, 
September 29, 2023.
49	 Id.
50	 Id. 
51	  “Restaurant Revitalization Fund: Opportunities Exist to Improve Oversight.” GAO-22-105442, U.S. Government Accountability Office, July 14, 
2022. 
52	 “SBA’s Award and Payment Practices in the Shuttered Venue Operators Grant Program.” Report 22-15, U.S. Government Accountability 
Office, July 5, 2022. 
53	 “SBA’s Internal Controls to Prevent Shuttered Venue Operators Grants to Ineligible Applicants”.  Report 24-02, Office of Inspector General, 
U.S. Small Business Administration, October 25, 2023. 
54	 “COVID Relief: SBA Could Improve Communications and Fraud Risk Monitoring for Its Arts and Entertainment Venues Grant Program.” 
GAO-23-105199, U.S. Government Accountability Office, October 2022. 

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The SVOG and RRF were rife with fraud. Notable cases include: 
1.	
A South Florida man was charged with fraudulently obtaining funds under SVOG and allegedly 
used the funds to purchase exotic sports cars.55
2.	 San Diego restaurant owners were charged with allegedly conspiring to underreport gross receipts 
in order to qualify for RRF loans, and lied on loan applications regarding the use of the money.56
3.	 Washington, D.C. restauranteurs plead guilty to tax offenses and theft of RRF funds for personal 
enrichment including for home construction, college tuition payments, and vacations.57
4.	 A Massachusetts food truck business owner was sentenced to two years in prison for a $1.5 million 
fraud scheme involving proceeds from RRF and other pandemic programs used to purchase 
shares in technology companies.58
5.	 A Florida couple were sentenced to prison for wire fraud conspiracy, money laundering conspiracy, 
and making false statements relating to SVOG and other pandemic programs totaling over $4.8 
million.59 
The SBA Overstated the Number of Referrals to the SBA OIG
On April 26, 2023, while under oath in front of the U.S. Senate Committee on Small Business and Entrepreneurship, 
Mr. Patrick Kelley, the former SBA Associate Administrator for the Office of Capital Access, made unsubstantiated 
allegations regarding the SBA’s activities. Specifically, Mr. Kelley testified that over a two-year period, the SBA 
referred 3.5 million applications to the SBA OIG.60 The SBA OIG was unable to validate—and indeed contradicted—
Mr. Kelley’s assertion. 
According to Mr. Sheldon Shoemaker, SBA’s Deputy Inspector General, who also testified at the hearing, the 
spreadsheets SBA provides on its internal fraud reviews include information obtained from the SBA OIG and 
other law enforcement agencies. For example, the spreadsheets SBA gave to the OIG include applications flagged 
for fraud based on the over 90,000 EIDL file requests from law enforcement agencies.61 These should not be 
considered SBA referrals. Instead, they are already ongoing investigations. Put simply, Mr. Kelley and the SBA were 
trying to claim credit for the work others have already done. 
55	 “South Florida Man Charged with COVID-19 Relief Fraud Allegedly Spends Loan Money on Exotic Sport Cars.” U.S. Attorney’s Office, 
Southern District of Florida, November 8, 2022.
56	 “San Diego Restaurant Owners Charged with COVID-Relief Fraud and Money Laundering.” Office of Public Affairs, U.S. Department of 
Justice, May 24, 2023.
57	 “Georgetown Restauranteurs Plead Guilty to Tax Offenses and Theft of COVID Relief Funds.” U.S. Attorney’s Office, District of Columbia, 
August 14, 2023.
58	 “Brighton Food Truck Business Owner Sentenced to Two Years in Prison for $1.5 Million COVID-Relief Fraud Scheme.”  U.S. Attorney’s Office, 
District of Massachusetts, July 26, 2023.
59	 “Tallahassee Couple Sentenced To Federal Prison For Wire Fraud Conspiracy, Money Laundering Conspiracy, And Making False Statements 
Relating To COVID-19 Relief Programs.”  U.S. Attorney’s Office, Northern District of Florida, May 3, 2023.
60	 “Hearing: Oversight of SBA’s Implementation of Final Rules to Expand Access to Capital.” U.S. Senate Committee on Small Business & 
Entrepreneurship, April 26, 2023. 
61	  Senate Committee on Small Business and Entrepreneurship, Answers to Questions submitted by Mr. Sheldon Shoemaker, Deputy Inspector 
General, U.S. Small Business Administration, Oversight of SBA’s Implementation of Final Rules to Expand Access to Capital, 118th Cong. 
on file with author (April 26, 2023). In response to “Has the SBA referred over 3 million instances of fraud on disbursed loans?”, Sheldon 
Shoemaker responded that “SBA has made numerous referrals of alleged fraud to OIG; however, OIG is unable to validate the SBA 
assertion… The spreadsheets that SBA provides encompass information they may have received from their own fraud reviews, ID theft 
submissions, information obtained from financial institutions, as well as information obtained from OIG and/or other law enforcement 
agencies. For example, the spreadsheets include applications that were flagged for fraud based on the over 90,000 EIDL file requests from 
law enforcement agencies. These should not be considered as referrals by SBA as they are already ongoing investigations.” 

10
In fact, contrary to Mr. Patrick Kelley’s testimony indicating a significant volume of referrals, the SBA referred 
few suspicious RRF awards to its OIG.62, 63 In July 2023, the U.S. Senate Committee on Small Business and 
Entrepreneurship requested Administrator Guzman either provide the underlying evidence substantiating 
Mr. Kelley’s claim, or correct his misrepresentation to Congress.64 As of the date of publication of this report, 
Administrator Guzman has failed to do either. 
The SBA states it has adopted a “Tone at The Top” for Fraud Risk Management 
though the SBA’s Actions Indicate Otherwise 
Establishing a strong “Tone at the Top” is an essential part of the internal control environment and internal control 
framework overall. This includes communicating a commitment to combat fraud within pandemic relief programs. 
Per the Standards for Internal Control in the Federal Government, “without a strong tone at the top to support an 
internal control system, the entity’s risk identification may be incomplete, risk responses may be inappropriate, 
control activities may not be appropriately designed or implemented, information and communication may falter, 
and results of monitoring may not be understood or acted upon to remediate deficiencies.”65
The SBA cites the “Tone at the Top” as one of its major principles for fraud risk management and as a key element 
to its Fraud Risk Management Strategic Plan.66 However, despite its rhetoric, SBA leadership is refusing to 
implement the GAO and the SBA OIG recommendations designed to improve the SBA’s fraud risk management, 
and is discounting the full extent of fraud. This sets the wrong tone and sends the wrong message.
The SBA should do more to leverage data analytics to prevent and detect fraud
The SBA itself acknowledges “the use of data analytics across an entire portfolio helps identify potential signs of 
fraud,” and states it has made substantial efforts on the use of data analytics.67 However, the SBA only performed 
data analytic treatment on a fragmented portion of the overall portfolio—fewer than 14% of loans, grants, and 
awards. The SBA indicates it performed “data analytic treatment” on 6.7 million of 49.3 million loans.68 Additionally, 
the GAO has found the SBA did not fully leverage information to help identify applicants who tried to defraud 
multiple pandemic relief programs and would benefit from further development of its data analytics program.69 
The SBA should perform data analytics across its entire portfolio to prevent and detect ineligible and fraudulent 
transactions. This may also result in more efficient allocation of resources, cost savings, and reduced loan review 
backlogs. 
62	 “2023 Annual Report: Additional Opportunities to Reduce Fragmentation, Overlap, and Duplication and Achieve Billions of Dollars in 
Financial Benefits.” GAO-23-106089, U.S. Government Accountability Office, June 14, 2023.
63	 “Restaurant Revitalization Fund: Opportunities Exist to Improve Oversight.” GAO-22-105442, U.S. Government Accountability Office, July 14, 
2022.
64	 Senator Joni Ernst. “Letter to the SBA Administrator Regarding Improper Payments.” U.S. Senate, July 26, 2023. 
65	 “Standards for Internal Control in the Federal Government.” GAO-14-704G, U.S. Government Accountability Office, September 10, 2014. 
66	 “Protecting the Integrity of the Pandemic Relief Programs: SBA’s Actions to Prevent, Detect and Tackle Fraud.” U.S. Small Business 
Administration, June 2023. 
67	 Id.
68	 Id.
69	  “COVID Relief: Fraud Schemes and Indicators in SBA Pandemic Programs.” GAO-23-105331, U.S. Government Accountability Office, May 
2023. 

11
Part 2: Efforts to Recover Funds
Overview of Recovery Efforts
Recovering money fraudsters stole from American taxpayers must be a priority for the federal government. The 
DOJ has seized more than $1.4 billion in stolen COVID-19 relief funds.70 The SBA OIG’s collaboration with the 
U.S. Secret Service, other federal agencies, and financial institutions has resulted in EIDL and PPP funds seized or 
returned to the SBA.71 Meanwhile, the SIGPR has rapidly scaled up its operations to complement these efforts.72, 73 
While law enforcement investigations and seizure of improperly obtained funds is vital, the SBA needs to do more. 
For example, the SBA has refused to pursue collections of loans valued at $100,000 as required by law, and has 
failed to take recommended steps to improve its fraud risk management. The SBA’s actions undermine efforts to 
maximize the recovery of funds for the taxpayer and could incentivize ineligible and fraudulent borrowers to obtain 
loans valued at $100,000 or less in future loan programs.
There is roughly $200 billion worth of fraud within EIDL and PPP programs.74 Instead of letting that money stay 
in the hands of fraudsters, it could be put to the service of the American people. Here are some examples of what 
$200 billion could buy the American taxpayer:
$200 Billion Estimated Fraud
$1.4 billion in funds seized 
by the Justice Department75
15 USS Ford class aircraft carriers (around $13 
billion each)
10% of the cost of 1 USS Ford class aircraft carrier
Over 250 million iPhone 14’s at $799 per phone
1.8 million iPhone 14’s
Annual U.S. health care spending for 15 million 
people (around $13,000 a person)
Annual U.S. health care spending for 108,000 
people
36 of the top 50 most expensive sports teams 
in the world at their 2023 valuation76
One of the 9 least valuable Major League 
Baseball franchises
438 million Taylor Swift Eras Tour tickets77
3 million Taylor Swift Eras Tour tickets
70	 “Justice Department Announces Results of Nationwide COVID-19 Fraud Enforcement Action.” Office of Public Affairs, U.S. Department of 
Justice, August 23, 2023. 
71	  “COVID-19 Pandemic EIDL and PPP Loan Fraud Landscape.” Report 23-09, Office of Inspector General, U.S. Small Business Administration, 
June 27, 2023.
72	 “SIGPR Quarterly Report to the United States Congress.” Office of the Special Inspector General for Pandemic Recovery, January to March, 
2021. 
73	 “Congressional Budget Justification and Annual Performance Plan and Report.” Office of the Special Inspector General for Pandemic 
Recovery, FY 2023. 
74	 “Covid-19 Pandemic EIDL and PPP Loan Fraud Landscape.” Report 23-09, U.S. Small Business Administration, Office of Inspector General, 
June 27, 2023.
75	 The SBA OIG reported its collaboration with the SBA, the U.S. Secret Service, other federal agencies, and financial institutions has resulted 
in nearly $30 billion in EIDL and PPP funds being seized or returned to the SBA. This consists of over $1 billion in seizures by the U.S Secret 
Service, $9 billion returned by financial institutions, and $20 billion paid from borrowers. The SBA OIG based the $9 billion and $20 billion 
figures on SBA reporting and does not have loan level detail to the data.
76	 Ozanian, Mike, and Justin Teitellbaum. “Baseball’s Most Valuable Teams 2023: Price Tags Are up 12% despite Regional TV Woes.” Forbes, 
March 23, 2023.
77	 Bhattarai, Abha, Lerman, Rachel, Sabens, Emily. “The Economy (Taylor’s Version).” The Washington Post, October 13, 2023.

12
The SBA’s Faulty Rationale and Unlawful Decision to 
End Collections on Loans Under $100,000
The SBA decided to forgo debt collections on EIDL less than $100,000. The SBA OIG calculated the amount of 
delinquent and past due EIDLs to be $62 billion as of March 24, 2023.78, 79 This is in addition to failing to pursue 
collections on PPP loans under $100,000, for an estimated $1.1 billion.80 In total, the SBA is intending to forgo 
collections on over $63 billion of COVID program loans made with Americans’ tax dollars, without justification or 
congressional authorization. As additional loans become due, the money being left on the table is only likely to grow. 
The SBA risks violating federal law by prematurely ending active collection activities on delinquent PPP and EIDLs 
with balances of up to $100,000. Federal law prohibits agencies from ending collections on fraudulent, false, or 
misrepresented claims.81 The SBA did not fully agree with the SBA OIG’s recommendation for the SBA to attempt 
active collection and review loan applications for any EIDL that appears to be fraudulent, false, or misrepresented.82 
Under the Debt Collection Improvement Act, federal agencies can only suspend or end collections on claims in 
certain circumstances including when the cost of collection is likely to be greater than the amount recovered for 
loans not more than $100,000.83 The SBA cited this as justification for not collecting on its loans. However, the SBA 
OIG determined the SBA’s April 2022 analysis was not comprehensive to sufficiently support the proposition that 
the cost to pursue collections on PPP loans valued at $100,000 or less was likely more than the recovery amount. 
The SBA was obligated to include comprehensive estimates of the expected costs and benefits for EIDL and PPP 
collections per Office of Management and Budget (OMB) Circular A-94. It did not. The SBA OIG also recommended 
the SBA explore alternative means of collections for EIDL and PPP loans with an outstanding balance of $100,000 
or less.84, 85 The SBA has not evaluated alternative collection techniques such as the Centralized Receivables Service 
(CRS) program within the Bureau of the Fiscal Service, a low-cost option available to federal agencies to manage 
nontax receivables.86 The SBA could use the CRS or pursue other options to meet the Treasury Financial Manual 
requirement to maximize recoveries for efficiency and cost-effectiveness.87 The SBA has not compared the cost 
effectiveness of alternative collection techniques as required by federal law.88
In addition, the SBA’s analysis for anticipated EIDL and PPP recoveries was flawed. The agency based its analysis on 
a 0.28% recovery rate—or $65,000 total recoveries out of $23.5 million—on SBA Express working capital loans of 
$100,000 or less made to sole proprietors between 2009 and 2022. This is an unrealistic comparison, at best. The 
$65,000 of SBA Express loans the SBA recovered over a 13-year period (around $5,000 a year) is not comparable 
to the $1.1 billion in PPP loans under $100,000 on which the SBA has ended collections, or the over $62 billion in 
delinquent or past due EIDLs under $100,000. In addition, SBA Express loans to sole proprietors are materially 
different to EIDL and PPP. Only about half of EIDLs of which the SBA plans to end collections were made to sole 
proprietors. Lenders likely pursued active collections on SBA Express loans prior to those loans being referred to 
Treasury, whereas EIDLs were direct loans made by the SBA and PPP had higher SBA guarantee percentages. As a 
78	 “Ending Active Collections on Delinquent COVID-19 Economic Injury Disaster Loans.” Report 23-16, Office of Inspector General, U.S. Small 
Business Administration, September 29, 2023.
79	 SBA indicated the number of delinquent, past due, or charged off COVID-19 EIDLs total $33.4 billion as of May 9, 2023. However, SBA OIG 
was unable to validate SBA’s significantly different amount which did not sync with SBA’s own loan accounting system of record and data.
80	 “Management Advisory — SBA’S Guaranty Purchases for Paycheck Protection Program Loans..” Report 22-25, Office of Inspector General, 
U.S. Small Business Administration, September 30, 2022. 
81	  “31 USC 3711(b)(1): Collection and Compromise.” U.S. Code.
82	 “Ending Active Collections on Delinquent COVID-19 Economic Injury Disaster Loans.” Report 23-16, Office of Inspector General, U.S. Small 
Business Administration, September 29, 2023.
83	 “31 USC 3711(a): Collection and Compromise.” U.S. Code.
84	 “Management Advisory - SBA’S Guaranty Purchases for Paycheck Protection Program Loans.” Report 22-25, Office of Inspector General, 
U.S. Small Business Administration, September 30, 2022. 
85	 “Ending Active Collections on Delinquent COVID-19 Economic Injury Disaster Loans.” Report 23-16, Office of Inspector General, U.S. Small 
Business Administration, September 29, 2023.
86	 “Part III: The Federal Nontax Debt Collection Process.” Bureau of the Fiscal Service, Treasury Financial Manual, Volume I, Part 3, Chapter 
5000, May 2023.
87	 Id.
88	 31 C.F.R. § 901.10

13
result, higher recovery rates can be expected for PPP and EIDL. A good-faith estimate could not equate a subset of 
SBA Express loans to sole proprietors with these two programs. 
Even the consulting firm the SBA hired to assess the EIDL portfolio determined expected recoveries to be 
significantly higher and inconsistent with the SBA’s conclusions.89 According to the SBA’s own reporting, EIDL and 
PPP loans have both maintained positive recovery rates, yet the SBA refuses to comply with federal debt collection 
requirements.90 The SBA is increasing the taxpayer’s burden by refusing to collect on these delinquent EIDL and 
PPP loans. Further, ending collection prematurely sets a dangerous precedent encouraging future borrowers in 
stimulus programs to not repay loans under $100,000. Continuing to pursue collections will ensure accountability 
for delinquent borrowers and bolster the integrity of federal lending programs. 
Improvements to the SBA’s Fraud Risk Management Would Assist in Recovering Funds
Due to concerns regarding the SBA’s lackluster response to fraud and improper payments in its pandemic relief 
programs, Small Business Committee Ranking Member Joni Ernst (R-IA) wrote a letter to the SBA Administrator 
emphasizing the importance of SBA leadership taking improper payments seriously given the significant fraud the 
GAO and the SBA OIG have highlighted within the SBA’s programs.91 As described within the letter, the SBA has not 
taken adequate steps to prevent and detect improper payments. 
The SBA’s failure to adequately identify improper payments within its programs makes identifying fraud and 
recovering funds more difficult.
89	 “Ending Active Collections on Delinquent COVID-19 Economic Injury Disaster Loans.” Report 23-16, Office of Inspector General, U.S. Small 
Business Administration, September 29, 2023.
90	 “Small Business Administration Loan Program Performance.” U.S. Small Business Administration, January 30, 2023. 
91	  Senator Joni Ernst. “Letter to the SBA Administrator Regarding Improper Payments.” July 26, 2023. 

14
Part 3: Opportunities for Future Legislation and Policy Changes
Congress must act to ensure criminals who defraud American taxpayers are brought to justice. Specifically, 
Congress should pass the Strengthening Taxpayer Recoveries Act, the Administrative False Claims Act, and 
legislation to enhance improper payment reporting requirements.
Strengthening Taxpayer Recoveries Act
In response to mounting warnings from the SBA OIG, the SIGPR, and throughout the small business community, 
Ranking Member Ernst is spearheading the Strengthening Taxpayer Recoveries Act, which she introduced on July 
27, 2023 along with Senators Josh Hawley (R-MO), Marco Rubio (R-FL), and Todd Young (R-IN).92
The Strengthening Taxpayer Recoveries Act would amend the CARES Act to provide the SIGPR with statutory 
authority to conduct investigations on the SBA COVID-19 relief programs and extends the SIGPR authority an 
additional five years to 2030. The bill allows the SIGPR to utilize funds recovered from investigations and audits. 
Collectively, these measures will restore the SIGPR’s authorities, ensure the SIGPR can continue its critical work, 
and provide a temporary surge of federal law enforcement investigators to help tackle the unprecedented scale of 
fraud within the pandemic programs.
In addition to strengthening the SIGPR’s ability to protect taxpayer funds, the legislation holds the SBA accountable 
to pursue fraud within its programs and recover funds for American taxpayers. Specifically, it requires the SBA 
Administrator to refer any claim for collection of a loan under $100,000 to the Department of Treasury. The 
Department of Treasury will then render a final decision to suspend, end, or make collections on referred claims. 
Furthermore, the legislation would enhance Congressional oversight of the SBA’s collection efforts. It would require 
that the SBA Administrator to provide monthly briefings to the Senate and House Small Business Committees on 
the progress the SBA is making on pursuing collections, and annual testimony before the House and Senate Small 
Business Committees on the implementation of the collection of claims in regards to covered loans, improper 
payments related to covered programs, and the SBA compliance with the Payment Integrity Information Act of 
2019. 
Beyond collections, the legislation would also require the DOJ Attorney General to report to Congress on the DOJ’s 
prosecutions of COVID relief-related fraud. The report will include data such as the total number and disposition 
of prosecutions, the total dollar amount recovered by prosecutions, the total number and source of referrals, and 
declined cases with reasons for declining prosecution.
It would also create a website with real-time data on COVID-19 program funds recovered by the federal government 
to help Congress and the public ensure that collections of fraudulently-acquired taxpayer funds become and 
remain a priority. 
Finally, to ensure fraudsters who abused the SBA’s COVID-19 program funds do not escape justice by running 
out the clock, the Strengthening Taxpayer Recoveries Act would extend the statutes of limitations to 10 years for 
Restaurant Revitalization Grants and the SVOG program in alignment with the statutes of limitations for both the 
PPP and EIDL programs. 
92	 Strengthening Taxpayer Recoveries Act, S. 2664, 118th Cong. (2023). 

15
Administrative False Claims Act of 2023
Congress should pass the Administrative False Claims Act, introduced by Senator Chuck Grassley (R-IA) and 
cosponsored by Senators Richard Durbin (D-IL) and Gary Peters (D-MI).93 The bill increases the maximum amount 
of a fraud claim that may be handled administratively from $150,000 to $1 million, allows responsibilities in the 
administrative process assigned to the Attorney General or an Assistant Attorney General to be delegated to other 
DOJ employees, and allows the government to recoup costs for investigating and prosecuting these frauds. The 
Administrative False Claims Act will improve the SBA’s ability to recover funds from fraudsters and serve as a 
deterrence to those considering fraud against the federal government, no matter the amount.
GAO open matters for Congressional Consideration
Finally, members of the Committees of jurisdiction (U.S. Senate Committee on Homeland Security & Governmental 
Affairs (HSGAC) and House Committee on Oversight and Accountability) should introduce and pass legislation 
to enhance improper payment reporting requirements, per the following GAO open matters for congressional 
consideration:94, 95
1.	
“Congress should amend the Payment Integrity Information Act of 2019 to designate all new 
federal programs making more than $100 million in payments in any one fiscal year as “susceptible 
to significant improper payments” for their initial years of operation.”96 
2.	 “Congress should amend the Payment Integrity Information Act of 2019 to reinstate the 
requirement that agencies report on their antifraud controls and fraud risk management efforts in 
their annual financial reports.”97 
3.	 “Congress should clarify that (1) chief financial officers (CFO) at CFO Act agencies have oversight 
responsibility for internal controls over financial reporting and key financial management 
information that includes spending data and improper payment information; and (2) executive 
agency internal control assessment, reporting, and audit requirements for key financial 
management information, discussed in an existing matter for congressional consideration in 
our August 2020 report, include internal controls over spending data and improper payment 
information.”98 
4.	 “Congress should require agency chief financial officers (CFO) to (1) submit a statement in agencies’ 
annual financial reports certifying the reliability of improper payments risk assessments and the 
validity of improper payment estimates, and describing the actions of the CFO to monitor the 
development and implementation of any corrective action plans; and (2) approve any methodology 
that is not designed to produce a statistically valid estimate.”99 
93	 Administrative False Claims Act of 2023, S. 659, 118th Cong. (2023).
94	 “Open Matters for Congressional Consideration: Action Can Produce Billions of Dollars in Financial and Other Benefits for the Nation.” GAO-
23-106837, U.S. Government Accountability Office, July 25, 2023.
95	 “Emergency Relief Funds: Significant Improvements Are Needed to Ensure Transparency and Accountability for Covid-19 and Beyond.” GAO-
22-105715, U.S. Government Accountability Office, March 17, 2022. 
96	 Id.
97	 Id.
98	 Id.
99	 Id.

16
CONCLUSION
Rampant fraud within the SBA pandemic relief programs is hurting taxpayers 
and the small businesses the programs were intended to serve. The SBA has 
discounted the full extent of fraud and instead, needs to prioritize combatting 
fraud and pursue fund recoveries. During his confirmation process, the SBA 
Deputy Administrator provided Senator Joni Ernst, Ranking Member of the 
Small Business and Entrepreneurship Committee, his firm commitments on 
a zero-tolerance policy when it comes to fraud. However, the SBA has not 
lived up to its promise. It is important to avoid setting a dangerous precedent 
that fraud is acceptable and future borrowers do not need to repay loans. The 
SBA’s failure to fully engage in the fight against fraud has resulted in increased 
caseloads for the law enforcement community and the need for a temporary 
surge of federal law enforcement investigators. We recommend Congress pass 
the Strengthening Taxpayer Recoveries Act, the Administrative False Claims 
Act of 2023, and implement four key GAO open matters for congressional 
consideration. These measures are vital for responsible use of taxpayer funds 
and for holding fraudsters accountable. 

17
Appendix 1. Oversight Work Conducted
Various oversight bodies such as the GAO and the SBA OIG have conducted audits and reviews into the pandemic 
relief programs carried out through the SBA. These reports have provided important recommendations to improve 
the structure of these programs, examined the effectiveness of the programs’ ability to help targeted businesses, 
and determined the factors that enabled fraudulent use of these programs. The Senate Committee on Small 
Business and Entrepreneurship, as part of its oversight work, has held hearings including: 
•	 A March 2021 hearing on “Oversight of SBA’s COVID-19 Relief Programs”; 
•	 A May 2021 hearing on “The Pandemic Response and the Small Business Economy”; 
•	 An August 2022 hearing on “Oversight of SBA’s COVID Economic Injury Disaster Loan Program”; and 
•	 An April 2023 hearing on “Oversight of SBA’s Implementation of Final Rules to Expand Access to Capital”.  
Other committees, such as the Committee on Small Business of the House of Representatives, have also held 
relevant oversight hearings on these pandemic relief programs.

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