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Ernst Fights “First Come, First Serve” Fraud at the SBA

Despite SBA dolling out more than $200 billion in suspected fraudulent pandemic recovery grants, sources say the entities tasked with recovering fraud are cutting staff and disbanding altogether.

WASHINGTON – More than $200 billion in COVID relief funds intended to support small businesses may have been fraudulently paid to 4.5 million scammers—including felons, gang members, and drug traffickers—and U.S. Senator Joni Ernst (R-Iowa), Ranking Member of the Senate Small Business Committee, is fighting to get the money back. Ernst is proposing new legislation requiring the Small Business Administration (SBA) to collect all of the COVID funds owed to taxpayers, including the money wrongfully given to fraudsters, and expand the jurisdiction of the Special Inspector General to find more fraud.

In addition, Ernst gave her July Squeal Award to Biden’s SBA for running a drive-thru for fraudsters and serving up tax dollars from COVID-19 assistance programs to almost anyone who asked, in any amount requested, without doing simple background checks or verifying the accuracy of applications. Some scammers literally posed as Barbie—using pictures of dolls as photo identification—were approved and received taxpayer money.

As word spreads that the entities charged with recovering fraud, namely the Special Inspector General for Pandemic Recovery (SIGPR) and the Pandemic Response Accountability Committee (PRAC), are beginning to shut down, Ranking Member Ernst is acting to ensure recoveries continue through her Strengthening Taxpayer Recoveries Act.

“Ex-cons, gang members, and drug traffickers – oh my! SBA’s fast fraud, made to order, allowed criminals to go on COVID spending sprees while thousands of deserving businesses in Iowa were left to fend for themselves,” said Ranking Member Ernst. “Instead of asking, ‘would you like fries with that,’ SBA should be focused on recovering ALL our wasted tax dollars. I will keep fighting to bring accountability to Washington and make Biden’s SBA squeal!”


As SBA ran the Paycheck Protection Program (PPP), Emergency Economic Injury Disaster Loans (EIDL), and Restaurant Revitalization Fund on a “first come, first serve” basis, the money ran out quickly, and many qualifying businesses were turned away as felons, gang members, and drug traffickers raked in cash. One alleged fraudster took home $8 million while nearly 2,000 struggling restaurants in Iowa were left empty-handed.

Ernst has long been concerned about SBA’s failure to recover misspent COVID funds. In April, Ernstdemanded the SBA pursue all debt collections, no matter the size, for all SBA COVID Programs. Ernst has also called on the SBA administrator to minimize losses to the taxpayer and to rectify SBA’s noncompliance with improper payment requirements.

Read Ernst’s July Squeal Award here.