WASHINGTON (TND) — According to a new report from the inspector general of the Small Business Administration, $3.6 billion in COVID relief aid was given to people who did not qualify for the funds.
“There’s lots of people out there that claim to be a small business that got literally billions of dollars, and they should not have been paid out by the federal government and the Small Business Administration,” said Open The Books’ Adam Andrzejewski to The National Desk’s Jan Jeffcoat.
Andrzejewski said that since 2019, there’s been a federal database called the “Do Not Pay” database.
“The SBA was mandated by law to run every potential applicant for a loan or a grant through that database. They didn’t do it, and arguably, SBA officials broke the law,” said Andrzejewski.
According to a report in the New York Times, 15% of the Paycheck Protection Program loans were fraudulent.
“These were loans meant to support mom and pop businesses on Main Street that are subject to potential fraud. So on one hand, you have all of this fraud, but on the other hand, you have a lot of recipients of those Paycheck Protection loans that quite frankly didn’t need the money,” said Andrzejewski.
One recipient of a PPP loan — Kanye West’s sneaker company, Yeezy LLC.
“They sell about a billion dollars worth of sneakers every single year, and they scooped up $2.4 million of paycheck protection loans,” said Andrzejewski. “There’s a lot of people out there that got a lot of money, millions of dollars, that didn’t really need the money.”
Out of the 75,180 loans that were given out to potentially ineligible recipients, 27,000 were already flagged for potential fraud, according to the report from the SBA.
“The SBA is a significant agency of the federal government. They were involved in dispersing hundreds of millions of dollars worth of COVID aid. We need an investigation to hold those officials accountable to the law,” said Andrzejewski. “I don’t think we’ve moved fast enough in just instituting basic accounting controls.”