A top senator recently received a warning from a government watchdog about a worrying increase in defaults on COVID-era loans. The watchdog, Brian Miller, highlighted that these loan programs have reported losses of over $1 billion as of November 2024. These numbers have been growing since debtors started making payments in July 2023. Miller expressed concern that without his office, there would be no one to protect taxpayers from further fraud.

The inspector general also mentioned that his office is losing staff and going through the process of shutting down. This could make it harder to pursue around 130 potential fraud cases. Senator Joni Ernst from Iowa is trying to stop this. She has drafted a bill to provide more resources to catch these fraudsters. Ernst believes that if her bill doesn't pass, dishonest loan applicants could get away with $200 billion in fraud.

During the COVID-19 pandemic, the government set up loan programs like the Paycheck Protection Program (PPP) and the Restaurant Revitalization Fund. These programs were on a first-come, first-serve basis. Critics pointed out that many qualified businesses were turned away, while others like gang members and drug traffickers managed to get the funds. One fraudster even used a Barbie doll photo for their loan application!

To tackle this, Senator Ernst has proposed a new bill called the Complete COVID Collections Act. This bill would extend the watchdog's authorization to 2030 and give them more jurisdiction over other COVID-related programs. It would also make the Treasury enforce loan collections more strictly and involve the Justice Department to report on pandemic-related activities.

By Wednesday afternoon, four other Republican senators had agreed to support Ernst's bill. These senators are Marsha Blackburn from Tennessee, Todd Young from Indiana, James Lankford from Oklahoma, and John Curtis from Utah, who recently replaced Mitt Romney.

Senator Fights to Catch COVID Loan Fraudsters

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