In the spring of 2020, the federal government did something it had never done before. To keep the economy from collapsing during pandemic lockdowns, it pushed about $1.2 trillion out the door through two Small Business Administration programs: the Paycheck Protection Program (PPP) and COVID-19 Economic Injury Disaster Loans (EIDL).
The money was supposed to keep small businesses alive and workers on payroll. A huge amount of it went to thieves.
The SBA’s own Office of Inspector General estimated in June 2023 that more than $200 billion of those funds, at least 17%, went out in potentially fraudulent loans. The watchdog blamed weakened controls designed to move money fast, writing that “the allure of ‘easy money’ in this pay and chase environment attracted an overwhelming number of fraudsters to the programs.” SBA OIG Report 23-09, June 27, 2023.
Six years later, the government is still chasing it.
The latest sweep: 160 defendants, $245 million
In September 2026, the Justice Department announced results of a nationwide COVID loan fraud enforcement push that ran from June 12 to September 1, 2026. It involved 44 U.S. Attorney’s Offices and 20 investigative agencies, including the FBI, Homeland Security Investigations, IRS Criminal Investigation and state police. U.S. Department of Justice, Office of Public Affairs, September 2026.
The totals:
- About 160 criminal defendants in all, with about $245 million in intended losses.
- About 80 newly charged, accounting for roughly $100 million in intended losses.
- About 43 guilty pleas, covering roughly $44 million.
- About 40 sentences imposed, covering roughly $100 million.
“Intended loss” is the amount the defendants tried to obtain, not necessarily what they actually received. And for the newly charged, these are allegations. Every defendant who has not pleaded guilty or been convicted is presumed innocent.
What the cases look like
The department highlighted several cases that show how wide the net was. According to prosecutors:
- Jamie Gray (Western District of Missouri) is alleged to have fabricated dozens of PPP and EIDL applications seeking about $55.9 million.
- Adrian Pupo Perez and others (Northern District of Iowa) are alleged to have filed 470 fraudulent PPP applications on behalf of about 100 individuals, seeking about $2.4 million.
- Melissa Fireside (District of Oregon), a former county commissioner, is accused in a case involving about $1.6 million and is described as an international fugitive.
- Eve Zou (Western District of Texas), a state employee, is accused of misusing about $319,800 in EIDL funds for personal real estate.
Look at who is on that list. A county commissioner. A state employee. People trusted with public responsibility, accused of treating emergency relief as a personal windfall. Attorney General Todd Blanche put it bluntly: “Pandemic loan relief was meant to keep American small businesses alive during government lockdowns — not line the pockets of fraudsters.”
The scale versus the response
Here is the uncomfortable math. The inspector general estimated more than $200 billion in potentially fraudulent loans. This three-month sweep covered about $245 million in intended losses. That is roughly one-tenth of one percent of the estimate.
That is not a criticism of the investigators. It is a measure of how big the hole is. Prosecutors cannot charge $200 billion of fraud one case at a time in any reasonable timeframe. The inspector general reported that nearly $30 billion had been recovered or seized as of its 2023 report. Much of the rest will never come back.
The watchdog has kept pushing the agency to fix the underlying problem. In a March 2025 follow-up, it noted that of 77 pandemic-related recommendations it had issued, 39 were still open as of June 2023. SBA OIG Report 25-10, March 31, 2025.
Why this fraud was different
Most fraud requires a con. This one required a form.
In 2020, the government made a deliberate choice to trust applicants first and verify later, because businesses were closing by the day. That choice may have saved many legitimate firms. It also created a system where anyone willing to lie on a federal form had a real chance of getting paid. The inspector general called it “pay and chase”: pay first, chase the fraud later.
What followed was not just organized crime rings. It was ordinary people who decided the rules did not apply to them because the money was there and the government seemed unlikely to check. Invented businesses. Inflated payrolls. Employees who did not exist. Relief money spent on personal real estate and private spending instead of wages.
That is what makes pandemic fraud one of the clearest windows into moral decay the country has ever produced. When the guardrails came down, a large number of people did not ask “is this right?” They asked “will I get caught?”
Who paid for it
Every dollar stolen from these programs is borrowed money, and the public is paying for it. It was supposed to go to the restaurant that kept its cooks on the payroll, the barber who could not open, the family business that survived by a thread. Honest owners competed for the same limited pool of funds as fraudsters with fake paperwork, and every fake loan that got paid was money that could not reach a real business.
Fraud on this scale also poisons the next emergency. The next time the country faces a crisis that requires fast relief, lawmakers will point to 2020 and demand slower, tighter programs. Some of those demands will be reasonable. Some of the people hurt by the delay will be the next generation of honest small business owners.
What real accountability requires
- Keep prosecuting. This sweep proves the cases are still there to be made six years later. Every one that can be charged should be.
- Recover the money. Convictions without restitution and asset seizure leave the public holding the bill.
- Close the open recommendations. An agency that has been told how to prevent the next disaster should not leave dozens of fixes pending.
- Build emergency programs with verification designed in. Speed and safeguards are not opposites if the tools are built before the crisis.
The verdict
The pandemic loan programs were an act of national trust. The government handed out money on the word of the people applying for it. By the inspector general’s estimate, more than $200 billion went out on applications that were potentially fraudulent.
The 160 cases in this sweep are a start, not a finish. The more important question is what the country learned about itself when the checks disappeared, and whether we will build the next system as though that lesson was real.
Sources
- U.S. Department of Justice, Office of Public Affairs, COVID loan fraud enforcement results, September 2026
- SBA Office of Inspector General, Report 23-09, “COVID-19 Pandemic EIDL and PPP Loan Fraud Landscape,” June 27, 2023
- SBA Office of Inspector General, Report 25-10, recommendations update, March 31, 2025
Featured photo: Robert F. Kennedy Department of Justice Building, Washington, D.C. APK, CC BY 4.0, via Wikimedia Commons.
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