The Lamborghini, the Fake Farm in Palm Beach, and 30 Seconds Per Application.

$800 Billion. No Income Verification. Honor System.

The Paycheck Protection Program was designed to move fast. Congress authorized $800 billion in forgivable loans to help small businesses keep workers on payroll during the COVID-19 pandemic. Borrowers self-certified their payroll figures, number of employees, and intended use of funds. Lenders were instructed to rely on that self-certification. No independent payroll verification was required for most loans. If you said you had 10 employees, you got the money for 10 employees.

Kabbage, a fintech lender that processed $7 billion in PPP loans, charged $1 billion in origination fees. Senate investigators found that Kabbage’s review process averaged 30 seconds per application — enough time to confirm the form was complete, not enough time to verify whether the business existed. Kabbage later settled PPP fraud oversight claims for $120 million.

A Rapper Bought a Rolls-Royce. An NFL Player Went to a Casino. A Doctor Got 15 Years.

Amir Aqeel, a Houston physician, submitted fraudulent PPP applications totaling $24.5 million for businesses that did not exist or had no employees. He was sentenced to 15 years in federal prison — one of the longest PPP fraud sentences in the country.

Maurice “Arkansas Mo” Fayne, an Atlanta rapper, obtained $3.7 million in PPP funds he claimed would cover payroll for a trucking business. He used $1.5 million to buy a 2019 Rolls-Royce, diamond jewelry, and a Lamborghini. He was sentenced to 17.5 years in federal prison.

Josh Bellamy, an NFL wide receiver, obtained $1.2 million in PPP funds. He spent it at the Seminole Hard Rock Hotel and Casino in Tampa. He was sentenced to 37 months in prison.

$200 Billion in Potential Fraud. $1.4 Billion Recovered.

The SBA Inspector General’s 2022 fraud landscape report estimated $200 billion in potential PPP and EIDL fraud — roughly one in every four dollars distributed. By 2026, Treasury had referred $22 billion in suspected PPP fraud to the IRS for tax enforcement. DOJ had charged more than 3,500 defendants. Total amounts recovered through seizures, forfeitures, and civil settlements: approximately $1.4 billion.

Recovery rate: under 1%. The program’s original fraud-prevention architecture was so thin that the GAO found the SBA “did not have policies, procedures, or internal controls specifically focused on fraud risk” when the program launched. The agency was given weeks to distribute hundreds of billions of dollars. They distributed them.

“SBA did not have policies, procedures, or internal controls specifically focused on fraud risk prior to establishing the PPP.”

GAO-23-105595 — Small Business Administration: COVID-19 Loans (2023)

$750 Billion Was Forgiven. Most Wasn’t Audited First.

Of the $800 billion distributed, approximately $750 billion was ultimately forgiven — converted from loans to grants based on borrower attestations that the funds were used for eligible payroll and business expenses. The SBA simplified the forgiveness application for loans under $150,000, requiring only a certification that the funds were used appropriately. No documentation required. No audit required. Just sign and the debt disappears.

The SBA did commit to auditing all loans above $2 million. Whether those audits have been completed, and whether the results have been referred for prosecution where appropriate, remains a question Congress has struggled to get answered.