Stop, Beware, the Fraudsters are out

On Tuesday, June 9, 2020, the Senate Judiciary Committee held a hearing on Pandemic Fraud.

Of the four witnesses that testified, the information most relevant to Stimulus Payment Fraud was presented by Calvin Shivers, Assistant Director Criminal Investigative Division, Federal Bureau of Investigation (“FBI”). Shivers' testimony is analyzed below.

Shivers noted that fraudsters are applying for Paycheck Protection Program (PPP) loans or targeting PPP funds once they have been disbursed.  Through May 2020, the FBI’s Internet Crime Complaint Center (IC3) call volume was already at the 80% mark of the 2019 annual total. 

Interestingly, many complaints were from business owners unable to apply for a PPP loan because their business Tax ID was already used for fraudulent loan applications. Additionally, fraudsters created websites claiming to facilitate PPP loans, so they can get all your personally identifiable information necessary to apply for a PPP loan, and then they apply for the loan, pretending to be you, and may even sell your information on the dark web.

The FBI is now on the fraudsters’ case through the creation of a PPP Fraud Working Group in coordination with the FBI’s Fraud Section and the Small Business Administration Office of Inspector General. The PPP Fraud Working Group and local FBI offices opened nearly 100 investigations, with over $42 million in potential fraud identified and over $900,000 recovered. 

The FBI’s preliminary findings are that in some cases, fraudsters are colluding with bank insiders, to use identity theft to access dormant accounts or cash businesses.

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