Identifying fraudulent PPP loans through network analysis | Hacker News Reader

Identifying fraudulent PPP loans through network analysis

tylerjamesjones.com

31 pointsapwheele14 comments

I hope that the federal government devotes hundreds of millions of dollars to research to identify this $80B in fraud and waste and hold each and every person, entity, leader, whatever, accountable - and figuratively burn them at the stake.

The PPP program's "spirt" was absolutely decimated by thousands of money grabbing small business owners who had single owner LLCs etc in businesses that were not dramatically affected by the pandemic, and typically in high earning professions such as lawyers, accountants, real estate agents etc - all of these people got complete handouts of tens of thousands of dollars of cold hard cash in loans that were completely forgiven. Everyone knows a real estate agent that has absolutely killed it in the last 2 years, and they also took PPP loans in the tens of thousands of dollars. It's disgusting.

I get that the "uncertainty" of the time necessitated people to take a hard look into the abyss and make some hard choices moving forward, but a lot of what I pointed out was absolute grift and disgusting. And we won't even talk about some of the businesses that worked their tails off to get funding and PPP loans (restaurants, retail etc) that had terrible times working through the maze of getting the loans. The disparity is disgusting. There IS a reason why trying to buy a top end Mercedes or BMW has been difficult, and it isn't ALL chip shortages and supply chain issues.

I own a two member LLC that is an amazing successful business, and we KILLED IT during the pandemic, and I could have easily applied for 90K in loans that would have been forgiven, but I made the conscious moral decision that I didn't need it, and there were more deserving business owners and firms that really did need that money.

It's gross and disgusting.

I hope projects like this continue to peel back the onion and nails these people to the wall. I frankly don't care that the government said "take the money."

It’s easy to have outrage in retrospect, but during the early days of the pandemic it seemed that every business would be decimated. You also have to remember that lawyers and accountants and these types of businesses you deem unworthy have lots of support staff, many of which would have been fired but for PPP funds.

I seriously question $80b being labeled as waste or even fraud. We look back now and can say lots of businesses didn’t need the funds, but only because programs like PPP stabilized the entire economy and created enough confidence to handle the transition.

So we as a society spent $80b but avoid Trillions of harm from what would have been the worst recession in two generations. Seems like a good trade.

Look, I definitely understand the purpose of the PPP program - and that was to get money flowing into the economy so that basic economics occurred - the flow of money in exchange for goods and services. And I definitely don't deem lawyers and accountants unworthy... but when you see real estate agents do 100M in sales last year and they drive a brand new S-Class, and oh, look, that agent took the max 48K PPP loan and had it forgiven, well, that's just not the spirit of the program.

When you get a chance, just poke around your local zip code and check out the people and entities that got money. It will be eye opening for sure. I'll bet you money you'll see a bunch of opaque shell LLCs all around you that got 10-20k here and there. You'll also see your local bakery or pizza joint that probably got life saving funding to keep people employed.

I guess for me it all goes back to the spirit of the program, and the depths that some humans will go to be greedy and take the "FU I've Got Mine" approach to life.

But by focusing on these types of issues there is risk of a chilling effect that will make it impossible to pursue these types of programs or have people accept these programs for fear of being prosecuted simply my accepting funds that are permitted but then vilified after the fact. I suggest instead on focusing on the massive benefit they had. Any waste or abuse is part of the cost of a program and should be accepted as unavoidable.

Same thing with a lot of other programs like Medicare or social security. Sure there are abuses but elder and child poverty are almost entirely eradicated compared to a few generations ago and waste and fraud are a small percentage of those programs. Yet critics make it seem like some profound injustice that must be dealt with. Why? Why must we deal with it?

Honestly I don’t think a real estate agent driving an s-class and getting a PPP loan is a problem. The funds could only be forgiven if the funds were used for payroll so it’s likely the money went to a secretary or other employee. Even if it didn’t and went to the business owner directly I think the overall benefit to society and economy still outweigh any violation of justice or fairness. The business continued to exist, spend money and by goods and services. And ultimately pay taxes. An agent doing $100m in sales pays plenty of taxes so $48k is a refund to promote continuing employment in the midsts of a profound public health crisis, seem like good policy to me.

But by focusing on these types of issues there is risk of a chilling effect

That's the thing. I took pause and said.. you know, Mnuchin looked me directly in the eye on TV and said "Take the Money. Do it." But I didn't, because, well, I know damn well at some point it wasn't going to be a good look for businesses that are doing extremely well to justify taking free government money. And that's what happened. I lot of big businesses got roasted.

And don't get me started on the political aspects of some of the people that literally look down on people in need and then gleefully rake in the cash from the government. But I also get the fact that many businesses were mandated to be closed or shutdown, and this could be considered payment from the government for those interruptions to businesses that otherwise would have been fine.

Good points all around. Thanks for the excellent differing perspective.

If you didn't have an existing relationship with bankers, it was difficult as hell to get these loans even if you did need them.

Still regrouping our small firm.

Interesting, but I’m not sure what to conclude from the graphs.

Anyone who had a side gig was eligible for PPP, regardless if they had a storefront. So it wouldn’t surprise me if there were some geographical outliers. Especially, if you work from home, then more remote properties would potentially be more desirable.

I would imagine half of them were but that's not the problem. The problem is that plenty of people who took that money then to mitigate risk will use it now to lawyer up against these claims and make no mistake they won.

> Created an edge if the two businesses were within half a mile

Well it certainly looks nice but it also seems to mean nothing at all.

"WERE they friends with republican donors, donald trump or a basketball team?"

It would be kind if we posted a TLDR with our submissions.

My impression is that the title’s accurate, with the exception of “identifying,” “fraudulent,” and “network analysis.”

I understood the title. What can we do about it, why should I care, etc?

TLDR; The author uses arbitrary distance metrics to construct a graph structure from a public dataset, which fails to reveal anything of interest.

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