WASHINGTON — Some of the most prolific online lenders in the federal Paycheck Protection Program had remarkably lax fraud protection controls even as they approved billions of dollars worth of loans in the COVID-19 small business relief program.
What’s more, executives tied to these online lenders obtained millions in PPP loans themselves that might have been fraudulent in their own right. And much like the dozens of PPP borrowers who have been arrested so far for defrauding the program, these executives appear to have used the proceeds from the loans and the millions they reaped in fees from their work in the program to make all-cash purchases of luxury properties and buy flashy sports cars.
That’s according to an eye-popping report released Thursday by the House Select Subcommittee on the Coronavirus Crisis that looked into the lending practices of several financial technology, or fintech, companies that processed loans in the signature federal small business relief program created as part of the CARES Act in March 2020.
