DOJ’s Fraud Division Subpoenas Big Banks In Investigation Into ‘Potential Abuse’ Over PPP Funds Meant For Small Businesses, Report Says

The United States Department of Justice has reportedly issued grand jury subpoenas to big banks seeking information about how they distributed emergency coronavirus funds that were intended to keep small businesses afloat during the pandemic.

Reuters reported that the move was “part of a broader investigation into potential abuse” of the $660 billion Paycheck Protection Program (PPP).
“The previously unreported subpoenas issued by the department’s Washington fraud division do not necessarily indicate wrongdoing on the part of the banks, but will compound growing worries among lenders that they risk being swept up in a federal crackdown on Paycheck Protection Program fraud,” Reuters reported. “The Justice Department opened a probe into the program last month and has already brought criminal charges against borrowers it alleges lied about the state of their businesses and numbers of employees.”
One of the sources that spoke to Reuters suggested that the investigation was also about looking into potential wrongdoing by borrowers.
“The concern we have is that you are going to see all manner of potential fraud,” said Brian Benczkowski, assistant attorney general of the Justice Department’s Criminal Division. “There is a potential there will be fraudulent or false statements on the loan applications to the banks. You might see non-existent businesses attempting to dummy up paperwork to see whether or not they can get that through the process at the bank and get access to a loan.”

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