At a September 10 press conference, Acting Assistant Attorney General Brian Rabbitt announced that the Department of Justice ("DOJ") Criminal Division has reached 57 criminal prosecutions for fraud in connection with the Paycheck Protection Program in under six months since its enactment. Those prosecutions are in addition to other federal cases brought by U.S. Attorneys around the country.
DOJ alleges those actions involved attempts to steal over $175 million in PPP funds. The Department has recovered or frozen over $30 million of the $70 million actually stolen. The Criminal Division has worked together with the FBI, the SBA's Office of Inspector General, the IRS, the U.S. Postal Inspection Service, and the Offices of Inspectors General from the FDIC and the FHFA to investigate and file these charges. Rabbitt also pointed to substantial assistance from private-sector lending institutions. Earlier this week, in an internal management memo to employees, JP Morgan Chase said it was investigating potential PPP fraud and abuse by its employees, including aiding fraud by others.
By the time the PPP closed new applications on August 8th, over 5.2 million loans had been approved, for a total in excess of $525 billion. Rabbitt pointed to the DOJ's use of data analytics in its effort:
"To bring these cases as quickly as we have, and to sort through the volume of loans made by the SBA, the Fraud Section and its partners deployed the first-in-class data analytics capabilities they have developed and employed to great effect in other criminal investigative areas, such as health care fraud and market manipulation. "
DOJ has identified at least 500 potential PPP-fraud targets, including in many cases, criminal rings conspiring to steal and launder PPP funds.
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