The criminal methodology utilized to fraudulently procure unemployment relief funds from the government varies depending on the program. For example, COVID unemployment relief fraud was largely carried out by individuals or organized crime groups using stolen identities to claim jobless benefits of up to $30,000 per identity.[7]
PPP Fraud has been facilitated much differently – and it was often more lucrative than UI schemes. Under the PPP program, banks and other financial institutions were allowed to distribute government-backed loans to businesses. Such loans were designed to cover certain business expenses, such as employee payroll.
If the proceeds were used for qualifying business expenses, the loans could be entirely forgiven. Unfortunately, lenders did little to verify applications, allowing millions of borrowers to inflate employment numbers, submit fraudulent paperwork, or create false businesses to illegally obtain funds.