One Emergency After Another: Researching Pandemic Loan Programs
Welcome to the October 2025 edition of our newsletter! In this issue, we’ll examine types of financial fraud related to pandemic-era programs, and highlight ways loan information can be useful for general asset tracing.
Pandemics, Panics, and Profiteering: Paycheck Protection Program Loan Fraud
More than five years after the start of the coronavirus pandemic, the cost of relaxed underwriting standards to help prop up a suddenly shuttered economy have become clear. Headline-grabbing stories include the purchase of a Lamborghini with a portion of PPP loan funds, and the conviction of individuals who prepared fraudulent forms to get loans for others, often creating entirely fake business entities, or grossly inflating the supposed revenues of existing applicants.
Acting more aggressively in a retroactive fashion, prosecutors have been going after large-dollar frauds, armed with a statute of limitations that begins ten years after the offense was committed. Checking the status of the loans obtained by a prospective business partner or vendor should be key part of your due diligence toolkit for at least the rest of this decade. Verification of an address and other claimed information – including whether the nature of a business could feasibly be performed at a residential address – is an essential part of the due diligence process.
Additionally, when performing broader asset searches, PPP loans information can be helpful to identify banking relationships and other important business data. When applying, companies were required to state how many jobs they thought would be affected by the loan, which can provide insight into the scope of otherwise privately-held, smaller businesses. Also, because PPP loans were issued in two draws between 2020 and 2021, any discrepancies between the two draws could indicate changes in business activity.
Perhaps most importantly, databases which have aggregated PPP loan data also identify the lender, often down to the local branch level, and whether each loan has been forgiven. Should your client obtain a judgment, related to any kind of civil matter, identifying a banking relationship would be fruitful for subpoenaing records and ultimately seeking to attach assets.
PPP loan data ultimately present an opportunity for researchers to glean important information about smaller, private businesses, while also presenting a risk that should be managed when looking to do business with PPP loan recipients. Since some companies were sued by lenders, or the principals were prosecuted for fraud related to the PPP loan, loan information has become a key data point when researching businesses and individuals.