At the time, businesses from beauty parlors to dentists and restaurants were forced to lay off employees.
To look at the potential for fraud in the program, the researchers analyzed more than 10 million PPP loans that provided more than $780 billion, using various indicators that loan information may be suspect.
One measure was whether multiple loans were granted at a residential address. Other primary indicators were whether loans went to businesses that weren’t registered or registered after the cutoff date of Feb. 15, 2020, to qualify for loans; whether reported pay to workers appeared high relative to the industry and business location; and whether businesses reported different job numbers on applications for another pandemic relief loan program.
In one example cited in the study, 14 loans totaling nearly $800,000 — all but one of them approved by Atlanta-based Kabbage — went to 14 businesses that all used the same address, a modest single-family home in the Chicago suburbs.
The companies had “colorful business names” and all claimed 10 employees. Eleven of the loans were for identical amounts, $53,229. Only one of the businesses was registered by Feb. 15, 2020. The other 13 businesses registered only shortly before the loans were approved.
Particularly high percentages of flagged loans cluster near Atlanta and New Orleans and surrounding areas, the report says.
Originally Appeared Here