CHARLOTTE, N.C. — A preliminary Congressional investigation found the federal government awarded more than $1 billion in potentially fraudulent Paycheck Protection Program loans.
The Select Subcommittee on the Coronavirus Crisis report, published this month, found "tens of thousands of loans issued by the Administration could be subject to fraud, waste, or abuse."
The preliminary report, created by House majority staff, identified 10,856 PPP loans totaling more than $1 billion that went to companies that received multiple loans. The investigation also identified more than 600 loans worth more than $96 million that went to companies debarred or suspended from doing business with the federal government and more than 350 loans worth $195 million that went to government contractors previously flagged for performance or integrity issues.
The Congressional investigation comes as federal prosecutors in multiple states, including North Carolina, are now pursuing PPP fraud criminal charges.
In recent weeks, federal prosecutors charged 31-year-old David Christopher Redfern of Trinity with wire fraud and bank fraud. The owner of Wilder Effects, a single-family home construction company, is accused of lying to collect a more than $400,000 PPP loan, according to federal court records. His attorney has not yet responded to WCNC Charlotte's request for comment.
From unreasonable delays to flat out denials, struggling Charlotte-area small businesses expressed concerns about the Paycheck Protection Program early on. As they faced major PPP loan hurdles, they shared frustration that publicly traded companies across the state and country, some with hundreds of employees, collected coronavirus relief, it appeared, with ease. The red flags were apparent to watchdog groups too.
"I've been concerned about that from the beginning," Rep. Adams said. "We turned that over to the Treasurer's Office. It just appears that things that should not have happened, happened anyway."
The subcommittee launched its investigation in June. Additional preliminary findings include red flags linked to another 11,000 loans totaling $2.98 billion and hundreds of approved loan applications missing identifying information, including names and addresses.
The report calls for better oversight moving forward. Treasury Secretary Steven Mnuchin assured subcommittee members all PPP loans of $2 million and more will be audited and said all remaining loans are also subject to review.