Hot Topic Tuesday — SBA OIG Urges SBA to Investigate $200 Billion of COVID-19 Fraud

Says the SBA Inspector General in a White Paper issued March 31, 2025:

Over the course of the COVID-19 pandemic, SBA disbursed approximately $1.2 trillion of COVID-19 EIDL and PPP funds. 

The economic assistance was intended to help eligible small business owners and entrepreneurs adversely affected by the crisis. 

A weak internal control environment can make programs vulnerable to fraud. In OIG’s white paper COVID-19 Pandemic EIDL and PPP Loan Fraud Landscape, we estimated SBA disbursed more than $200 billion in potentially fraudulent loans through COVID-19 relief programs. To establish this estimate, OIG used investigative casework, prior OIG reporting, and advanced data analytics to identify multiple schemes used by fraudsters to steal from the American taxpayer and exploit programs meant to help those in need. 

We believe loans identified as potentially fraudulent as part of our review warrant investigation by OIG and its investigative partners. 

While fraudulent payments are considered improper, not all improper payments are the result of fraud. Since the COVID-19 pandemic was declared a national emergency in March 2020 through the issuance of OIG’s fraud landscape report in June 2023, OIG issued 77 pandemic-related recommendations to SBA. Of the 77 recommendations, the agency had taken corrective actions to close 38 of them and 39 recommendations remained open as of June 2023. 

SBA has been working on implementing the corrective actions necessary to close the open recommendations.