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IPFS News Link • Investigations

PPP program was awash in fraud. Now, one lender may finally face a legal reckoning

• https://www.mcclatchydc.com BY BEN WIEDER

But the program, which tasked banks and other private lenders with processing applications, was beset by fraud from its earliest days in the spring of 2020, with some recent estimates suggesting that more than $117 billion of the $780 billion in federal loans went to ineligible businesses. Hundreds of borrowers have been prosecuted for submitting fraudulent PPP applications, but few lenders have been held accountable for their role in approving these fraudulent loans. Now, thanks to an obscure filing in one of South Florida's many PPP fraud cases, it has been revealed that one of the biggest lenders in the program's first year might soon be facing consequences. The online lender Kabbage disclosed in the Florida case that it is under investigation by U.S. attorneys in Massachusetts and the Eastern District of Texas for its PPP lending practices. Those investigations are being coordinated by the U.S. Department of Justice's Civil Division, the filing said. Neither district nor the DOJ responded to requests for comment.


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