‘DOGE’ senator seeks to ensure feds can continue pursuing COVID fraudsters, debtors, as IG sounds alarm

FIRST ON FOX: A top “DOGE” senator said a government watchdog alerted her to an “alarming” rate of defaults on COVID-era “PPP” loans, and now she wants to hold fraudsters accountable.

In a letter to Sen. Joni Ernst, R-Iowa, Inspector General for Pandemic Recovery (SIGPR) Brian Miller wrote that the loan programs funding reported losses of $1.27 billion as of November 2024, and had snowballed since debtors’ initial payments began coming due in July 2023.

“Without SIGPR to protect the taxpayer, there will be no one on watch which will allow this crisis to continue,” Miller wrote.

“Of equal concern is an alarming rate of defaults by borrowers who are failing to pay even the interest payments on the loans for the Main Street Lending Program (MSLP) and the Direct Loan Program.”

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A page from the PPP loan application for financial support due to the outbreak of COVID-19 in New York. May 7, 2020.  (REUTERS/Lucas Jackson)

The inspector general added that their office has been “shedding staff” and going through legally mandated processes for an agency in the process of shutting down.

There are at least 130 potential defendants identified to be probed, and without proper resources, they may never be so.

Ernst warned that dishonest loan applicants could get away with $200 billion in fraud from COVID-19 relief if her bill does not pass.

Sen. Joni Ernst, R-Iowa, has drafted legislation that would provide additional resources to hold coronavirus pandemic fraudsters accountable.  (Reuters/Bonnie Cash)

“Con artists took advantage of small businesses’ pain during COVID to defraud government programs designed to help hardworking Americans,” Ernst said Wednesday. 

“While we are $36 trillion in debt, we especially cannot afford to leave more than $200 billion floating around, especially in the hands of fraudsters. My Republican colleagues and I are making sure that all resources are available in this fight to get taxpayers’ money back and hold these criminals accountable.”

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When the Small Business Administration initiated the Restaurant Revitalization Fund and Paycheck Protection Program (PPP) loans, they were on a “first come, first serve” basis.

Critics claimed at the time that many qualifying businesses and entities were therefore turned away, and reports proliferated that gang members and drug traffickers were instead able to access the resources.

One alleged fraudster used a photo of a Barbie doll as their identifier on an SBA loan application, while another raked in $8 million that could have gone to struggling restaurants – particularly in states with onerous shutdown policies. 

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In response, Ernst has drafted the Complete COVID Collections Act, Fox News Digital has learned.

The bill would extend authorization of the SIGPR through 2030 and expand its jurisdiction to cover other SBA COVID-related programs. As of Wednesday, the SIGPR is only authorized into September.

The proposal also directs the Treasury to enforce collection of loans under $100,000 as stringently as high-dollar alleged scofflaws and late-debtors.

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It also brings in the Justice Department, requiring the law enforcement agency to provide regular reports to Congress on activities related to pandemic-centric programs including prosecutions, fund recovery and referrals to the DOJ from other entities.

By Wednesday afternoon, Ernst’s bill gained co-sponsorship from four other Republicans: Sens. Marsha Blackburn of Tennessee, Todd Young of Indiana, James Lankford of Oklahoma, and John Curtis of Utah – who was just seated following the departure of Mitt Romney.