Partner Brian Hayes was quoted in a Pew Charitable Trusts article about how fraud schemes involving unemployment benefits and the Paycheck Protection Program have led to millions of dollars in false applications. There have been tens of thousands of attempts to rip off governments by fraudulently filing for expanded unemployment benefits or lying on applications for the Paycheck Protection Program, which was designed to assist small businesses forced to close or drastically cut back due to the pandemic.
Mr. Hayes said attorneys general are warning lenders to watch for applications from people purporting to own small businesses or claiming large numbers of employees when they don’t exist. Small-business owners should be leery of offers to help them obtain PPP loans, especially from companies that want a payment for doing so, since applying for a loan is free. “Circumstances required that the aid be made available quickly to people,” Mr. Hayes said. He said federal administrators “relaxed due diligence and underwriting standards that would otherwise apply to commercial loans. That made [borrowing] easier but it was necessitated by the crisis.”
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