Almost 70K ‘questionable’ Social Security numbers used for $5.4B in pandemic-related loans: watchdog

A pandemic watchdog group identified nearly 70,000 “questionable” Social Security numbers that were used to obtain $5.4 billion in pandemic-related federal loans.

The group, the Pandemic Response Accountability Committee, issued the report on Monday analyzing information from more than 33 million applications from the COVID-19 Emergency Injury Disaster Loans and the Paycheck Protection Program. The group found that more than 221,000 Social Security numbers used on applications were “not issued” by the federal government, or did not match the applicants’ name or date of birth.

Despite the risk for identity fraud, the federal government awarded nearly 70,000 of the 221,000 Social Security numbers flagged for potential identity fraud a loan or a grant. About 175,000 of the Social Security numbers that were flagged for potential identity fraud attempted to receive a loan or grant, but were unsuccessful, according to the report.

The group determined that the Social Security numbers may be potentially fraudulent by cross-referencing public data from the Social Security Administration. The watchdog said that both of these relief programs were more “susceptible” to fraud because of the “elevated urgency” to provide aid to applicants during the COVID-19 pandemic.

The watchdog said that there need to be more information-sharing agreements across agencies to ensure there is adequate verification of Social Security numbers. It said that the loans and grants awarded to the flagged Social Security numbers could have been “questioned further” by the Small Business Administration, which also could have verified the numbers with the Social Security Administration.

The report acknowledged that implementing information-sharing agreements between the Social Security administration and other agencies can be a “lengthy” process. During an emergency, such as the coronavirus pandemic, these agreements could cause delays in executing the program effectively, the report read.

“Having such information-sharing agreements in place before an emergency would ensure timely access to verification information and improve federal program integrity, protect taxpayer funds from improper payments and fraud, better ensure benefits are paid only to those who are truly eligible, and reduce the incidence of identity fraud in government programs, thereby helping protect victims of identity theft” the report stated.

The report said that both the COVID-19 Emergency Injury Disaster Loans and the Paycheck Protection Program “provided nearly $1.2 trillion in assistance to small businesses and their employees affected by the COVID-19 pandemic.”

This report comes ahead of a House GOP hearing to investigate federal funding during the pandemic on Wednesday, titled “Federal Pandemic Spending: A Prescription for Waste, Fraud, and Abuse.”

—Updated at 12:23 p.m.