The proof for eligibility was basically self-attestation.
this post was submitted on 31 Aug 2024
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Explain Like I'm Five
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A lot of large companies would file with their subsidiaries, pretending to be much smaller companies and thus eligible for these loans meant for small businesses.
My congressmen took a few million for his car dealership, and decided he shouldn't have to pay it back.
Who?
Mike Kelly, NW PA.
He also sued his own state because we didn't vote for Trump.
It was really easy. The Paycheck Protection Program wasn't administered by the government directly. Instead, it authorized banks and financial institutions to issue PPP loans using government money. These institutions were told they wouldn't be found at fault if they gave money to a fraudulent applicant. So they were authorized to give out money that wasn't theirs and couldn't be found at fault even if they gave it to a fraudster. There was zero reason to check if the application was real or filled with fake information. It's estimated that, of the 21 million PPP loans issued, 10% were fraudulent.
Trump also removed all the regulations around actually regulating it.
So instead of helping those in need it just became first come first serve
Another sleazy angle of this was that many of these large recipients somehow had their applications ready to submit literally the second the program became active. This means a lot of legitimate applicants who didn't have access to the forms until the program went live were shut out due to all the funds being used up by the aforementioned individuals.
Yeah, it's not that the fraudsters got past the red tape, there just wasn't any to begin with.
It was all honor system, and with billions of dollars at stake, honor is the first thing to go.
This was called the minute they put the PPP loan idea together. Where's the oversight? How can fraudulent claims be avoided? The PPP loss still wasn't as big as the blank checks given to major corporations like airlines to keep the economy machine rolling. And in one sense I'm okay with government stepping in to avoid disaster, that's one of their jobs. It's just so many of these companies got free money that they really didn't need to stay alive, all because they smelled the opportunity...plus they took money that smaller businesses needed and no longer exist.
and people wonder why other people don't trust banks or institutions
Basically, the goal was to get money out as fast as possible. Accept application, send money, then investigate later. I think if Trump won in 2020, we would have seen far less PPP prosecutions.
My company filed for two PPP loans to keep afloat. Any company could have just kept making money and the owners could have pocketed the cash. There were expectations that employees were not fired and other questions in the application that I can't recall. When we applied for forgiveness on the loans we provided tax receipts and staff numbers over time. I'm sure it would have been pretty straightforward to lie or find someone to lie for you (accountant with less than stellar ethics).
Trump gave these out as government welfare to his wealthy buddies