Vice President J.D. Vance announced Monday that the government is barring 870,000 people from getting future federal loans because they are suspected of defrauding the government during the pandemic.
They accounted for nearly $50 billion in bogus small business loans, officials said. Letters will be mailed out starting this week notifying them they’re banned.
“If you screwed the American taxpayer, the federal government is now going to say you’re cut off,” Mr. Vance said at an appearance in Kansas City, flanked by Attorney General Todd Blanche, FBI Director Kash Patel and Small Business Administration Administrator Kelly Loeffler.
The ban is another stick in the arsenal against fraud and gives the government a recourse other than a full prosecution.
Mr. Vance said the ban isn’t a punishment for past behavior as much as it is an assessment of their risk as a potential future borrower.
Mr. Vance, who was tapped to lead President Trump’s task force on combating fraud, also called upon Democrats to join the fraud fight.
“Congressional Democrats have been so captured by far-left advocacy groups that they can’t even participate in something as common sense as protecting the American taxpayer’s money,” he said. “We can’t allow it to be normalized that the American people get stolen from by fraudsters.”
The SBA shoveled $1.2 trillion out the door in assistance during the pandemic. The Paycheck Protection Program and Economic Injury Disaster Loans were the two biggest programs, allowing small businesses to borrow to keep their operations afloat amid the shutdown orders.
The PPP loans could be forgiven if businesses met the conditions.
Under PPP, financial institutions were charged with getting money out quickly. Fraudsters quickly realized how easy it was to scam the program with bad applications.
Some filed for loans for companies that hadn’t existed for years, or existed purely on paper, but generated no revenue and had no employees.
Others fabricated firms, lied about their number of employees, or took the money and spent it on themselves rather than on their business.
The Justice Department is still charging people with fraud, but those cases amount to just dozens per month. The loan ban gives the government a wider reach.
Many of the loan recipients have also been referred to the Treasury Department for collections.
Mr. Vance said there will be an appeals process for people to challenge their ban, but he doubted it would see much use.
“Almost no one will do that because every single person who has defrauded the federal government knows they have done that,” he said.
Mr. Vance blamed the Biden administration for the massive fraud, though the programs got rolling in spring 2020, under the first Trump administration.
All told, the SBA’s inspector general has calculated that more than $200 billion in PPP and EIDL money may have gone to fraud.
Mr. Vance’s task force has ranged well beyond pandemic fraud and is highlighting other government programs beset by fake applications, such as Medicare and Medicaid billing.
Mr. Patel announced Monday that the FBI has captured another target on its new Most Wanted fraudsters list.
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