Watchdog Sounds Alarm On $5.4 Billion Of Potentially Fraudulent Pandemic Loans

The Pandemic Response Accountability Committee—or PRAC—has identified billions of dollars in potential fraud and identity theft related to pandemic relief loan programs.

The PRAC report, issued this week, identified 69,323 questionable Social Security Numbers used to obtain $5.4 billion from the Small Business Administration’s Economic Injury Disaster Loan program and the Paycheck Protection Program. Together, these programs paid out nearly $1.2 trillion in assistance to businesses and their employees during the pandemic.


PRAC began its analysis by examining more than 33 million applications tied to the EIDL program and PPP. The PRAC team then used publicly available Social Security Administration information to identify SSNs used on applications that may have been invalid or not assigned before 2011.

Armed with this data, PRAC then requested verification information for these SSNs. Specifically, they asked the SSA four questions:

  • Is the SSN valid?
  • Does the name associated with the SSN on the loan match SSA records?
  • Does the date of birth associated with the SSN on the loan match SSA records?
  • Is the SSN used on the loan associated with a deceased individual?


The SSA revealed that 221,427 of the SSNs used on applications in the analysis were either not issued by SSA or that identifying information in SSA’s records did not match the information provided by the applicant, suggesting potential identity fraud. SSNs that have not been issued and cannot be attached to an individual may indicate so-called synthetic identities—a combination of real and fictitious information like a fake SSN with a real name.

Of those SSNs, applicants used 69,323 SSNs to pocket $5.4 billion in EIDL or PPP loans between April 2020 and October 2022. The lion’s share of those funds—$3.4 billion—was paid to applications with SSNs that did not match the correct name.

Interestingly, many SSNs in the original selection were associated with deceased individuals. PRAC did not include those SSNs and the associated loans in the overall analysis because they are still working to determine whether those folks were alive when the application was submitted.

An additional 175,768 of the SSNs were used in applications that were attempted but not disbursed.


To date, the SBA has provided over $378 billion in COVID-19 EIDL loans and COVID-19 EIDL grants and $800 billion in PPP loans. Most of those funds were handed out at the onset of the relief programs. PRAC reports that by April 16, 2020, just 14 days after SBA launched PPP, lenders had approved more than 1,661,000 loans totaling nearly $342.3 billion—40% of the overall total.

Before the PPP, the SBA’s largest total in lending in one year was $30 billion. Yet, in fiscal year 2020, the SBA processed nearly $50 billion in loans in a single day.

PRAC found that this sense of “elevated urgency” to get money in the hands of businesses made the pandemic loans more susceptible to fraud.

The procedures available to agencies at the time also played a part. For example, the ability to perform the type of SSN check that PRAC conducted in this analysis was not easily available to the SBA in 2020.

Report Implications

Some of the information from the report can be used to create processes to prevent future fraud. But there are also real-world implications for potential fraudsters since PRAC will be working with authorities, including the Department of Justice and law enforcement, to follow up on the $5.4 billion identified as potential fraud and identity theft.

About PRAC

PRAC was created under the CARES Act to support and coordinate independent oversight of more than $5 trillion in pandemic relief programs and spending. In simple terms, they look for and help prevent abuse and mismanagement of funds. You can watch a short video about their mission here.

Protect Yourself

Fraudulent loan applications can result in consequences beyond the waste of taxpayer money—they can also wreak havoc for victims who have had their identities compromised. If you think you are a victim of fraud or have information regarding criminal activity, you can submit a complaint to PRAC’s Hotline.

For more information about protecting yourself from fraud, visit the PRAC’s Fraud Resources page.

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