Over $5 billion in pandemic relief went to businesses with 'ineligible' Social Security numbers: report

As House GOP members prepare to convene for their first hearing to review the trillions in federal stimulus support distributed since the start of the COVID-19 pandemic, a watchdog revealed that the federal government possibly paid $5.4 billion to support small businesses with ‘ineligible’ Social Security numbers, The Washington Post reports.

The Pandemic Response Accountability Committee (PRAC) shared with The Post its discovery after submitting a fraud alert earlier this week proving it found that 69,233 small businesses used “questionable” Social Security numbers to receive COVID-19 relief payments.

CNN reports that the programs that provided pandemic support were both launched under former President Donald Trump, “and run by the Small Business Administration (SBA), the paycheck Protection program (PPP) and the COVID-19 Economic Injury Disaster Loan (EIDL).”

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The PRAC’s revealing alert reflects what The Post calls “the latest indication that Washington’s haste earlier in the pandemic opened the door for widespread waste, fraud and abuse.”

Near the start of the pandemic, from April 2020 until October 2022, nearly 70,000 small business applications out of a total of 221,000 were approved to receive financial aid, the alert also revealed.

The alert reads, “The ability to perform the type of SSN check the PRAC conducted was not readily available to SBA when it faced a deluge of applications in 2020 for COVID-19 EIDL and PPP relief, as described in more detail throughout this Alert. Nevertheless, the results of this Fraud Alert demonstrate the benefit of a consent-based verification process to authenticate basic applicant information—such as name, date of birth, and Social Security Number—to ensure applicant eligibility and to prevent program and identity fraud."

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A spokesperson for the Small Business Administration said in a statement that SBA is “committed to tackling issues of identity theft and other types of fraud to prevent the theft of funds from the government, taxpayers and deserving small business owners.”

The alert also noted that PRAC officials found that the 221,000 ineligible numbers were “either were not issued by the government or did not match the name and date of birth on record with the government, ‘suggesting potential identity fraud.’”

Michael Horowitz, chair at The PRAC will testify during this week’s hearing.

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The Washington Post's full report is available here (subscription required).