JPMorgan Investigates Misuse of COVID-19 Stimulus Funds
Unfortunately, some people are abusing emergency COVID-19 relief.
Millions of Americans have been struggling financially in the wake of COVID-19. Some are depleting their savings accounts to compensate for lost income. Others are filing for unemployment or seeking out government assistance. And many small business owners have sought relief from the Paycheck Protection Program (PPP), which issued loans that had the potential to be 100% forgivable.
But Bloomberg has just reported that JPMorgan Chase & Co has found upsetting evidence that some of its customers and employees have misused relief funds. These include PPP funds, unemployment benefits, and other government programs. Not only does that conduct defy the firm's standards, it may even be illegal.
Sadly, this news isn't surprising. There have already been reports of misconduct surrounding PPP loans. And earlier this month, a congressional subcommittee found that over $1 billion in federal coronavirus relief funds went to U.S. small businesses that received multiple loans.
Why has there been so much fraud?
Many people -- and businesses -- have been desperate for relief during the COVID-19 crisis, and some may have gone to extreme measures to get it. But a big part of the problem stems from the way the PPP was rolled out. Banks were initially overwhelmed with applications, and their criteria were lax at best. To qualify for a PPP loan, businesses simply needed to certify that they were facing economic uncertainty in light of the ongoing pandemic. And really, who couldn't claim that in earnest back in April, when PPP applications really started rolling in?
Later on, some of the rules surrounding the PPP were clarified. For example, small businesses with access to outside capital were instructed to return their PPP loan funds. But ultimately, it was up to individual recipients to do the right thing -- and many didn't.
To date, a number of PPP recipients have, indeed, been charged with fraud. And that total could grow exponentially as more and more unscrupulous practices come to light.
And it's not just the PPP that's been abused over the past few months. The FBI has also seen a spike in fraudulent unemployment claims -- namely, those involving stolen personal information. Specifically, criminals are filing claims for benefits in other people's names -- including people who are still employed and not actually eligible for benefits.
This activity is not just illegal and immoral, it also takes crucial funds away from the people who need relief the most. If you become a victim of unemployment fraud or learn of it, contact your state unemployment agency immediately to report it. The FBI also encourages victims to report fraudulent activity to the Internet Crime Complaint Center. Meanwhile, those who learn of PPP fraud should contact the Office of Inspector General's hotline at 800-767-0385 or online.
Of course, if you need relief during the pandemic, you should apply for the benefits you're legitimately entitled to and seek out coronavirus resources that can help. These may include:
If you own a small business, you should know that the PPP is now closed, but there may be provisions for small business owners in a second COVID-19 relief bill. Lawmakers are currently in the process of hammering out a package that may or may not include a second direct stimulus payment.
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