PPP fraud history's worst: $200B stolen and blown on fancy cars and beach houses | Hacker News Reader

PPP fraud history's worst: $200B stolen and blown on fancy cars and beach houses

nypost.com

32 pointsmyshpa33 comments

SCENE: COVID, clients started backing out of / delaying design contracts.

My boss first cuts his own salary. He has seven kids. PPP comes out and he applies for/receives it. Still keeps salary cut. Company stays afloat through several tough months. Finally, he has to lay me off. No hard feelings; important to me that he can keep all my friends employed. I live off of resourcefulness and moxie for a few months.

Fast forward to today. The firm made it, and their clients came back in full force. I was the only casualty. I couldn't be happier. I found a new gig and am very happy with my new lot in life.

In that anecdote, PPP kept ten families fed and [health] insured. I hope that the fools who robbed us all during that time find justice at their door soon.

90,000 actionable leads, “dozens” of cases filed. That’ll show them!

So much for certainty of punishment.

Somewhat overshadowed by mismanagement of the CARES Act.

https://www.rollingstone.com/politics/politics-features/covi...

Both of which, of course, were the worst possible ways to get money into individual people's pockets. I'm not counting 2008, because that was designed to get money into the financial system, temporarily replacing risk in the banks with national risk.

Unemployment extensions were about the only decent part of all three covid bills. Even that had issues are incentivizing people to quit, but at least it attempted to target the right people. None of the other provisions did. Trillions of dollars in idiotic spending. Bipartisan too.

I know multiple "regular" "scammer" types that deliberately grifted this for tens of thousands of dollars.

One of those people was dating a friend of mine at the time and tried to strongarm them into signing the loan agreement so they could get a second PPP.

Same kinda folks that hook up credit card skimmers at gas pumps and then buy a bunch of gift cards. It's a lot more widespread than people think.

You could buy fancy cars and beach houses on with PPP absolutely legally. You were only required to spend 60% on payroll, the rest was just a gift for being an employer.

It's good news that the frauds are being pursued. I'm surprised it hasn't been a larger topic in the politics, maybe it will be next year.

Democrats don't want to touch the COVID response and gov't missteps, some Republicans do but this bill was signed by Trump so it will be off limits mostly.

The voters in general just want to forget the whole thing I think, other than a few very angry people who saw their livelihoods destroyed.

Some techies got busted for fraudulent loans. I don't know why smart individuals mess with feds by faking tax filings and other stuff.

[1] https://www.justice.gov/opa/pr/tech-executive-pleads-guilty-...

Interesting dilemma. The idea was to get that cash out as quickly as possible, which meant lowering barriers. Even with the reduced thresholds, people with small businesses like restaurants, dry cleaning, etc had trouble as they weren’t used to filling out government forms.

Of course that made it easier for fraudsters, but which is worse: not getting cash into the economy or having to try to claw back fraudulent dispersals? There isn’t an easy answer to this.

In retrospect it might have been better to rope in the accountants and/or payroll companies rather than the banks — most companies, even tiny ones, hire someone to do the books and file the tax returns, and those people have some legal accountability and already have access to the required data.

> which is worse: not getting cash into the economy or having to try to claw back fraudulent dispersals

The latter by far. “Getting cash into the economy” is the solution to a demand shortfall recession. There wasn’t a demand shortfall. There was nothing to stimulate because everything was closed. We all saw the results in unprecedented inflation acceleration. Bad policy has real consequences.

> We all saw the results in unprecedented inflation acceleration

Please argue your point without hyperbole. Inflationary periods from the 1970s back to the gold strike shocks of the 19th century were both much larger and, in the gold standard era, faster.

> “Getting cash into the economy” is the solution to a demand shortfall recession. There wasn’t a demand shortfall. There was nothing to stimulate because everything was closed.

Instead of "cash into the economy" for the sake of stopping a recession based on a demand shortfall, you should look at it as "cash into the economy" to prevent individuals who no longer had any income, and companies which no longer had customers from going bankrupt. Covering the mess of mass bankruptcies, hunger and homelessness was going to be drastically harder. Potential or real inflation are absolutely worth it as tradeoffs.

We knew who had lost income vs 2019 based on tax records. How is sending money to everyone up to generous income caps, and calling them stimulus checks, consistent with you theory for the motivation of the helicopter money drop bills?

> which is worse: not getting cash into the economy or having to try to claw back fraudulent dispersals? There isn’t an easy answer to this.

There is an easy answer to this that was obvious from the start. Give people money instead of businesses. You can get a great estimate of which people need how much from the tax returns. This is going to relieve most problems.

There are other problems, like rents that have to be paid even if there are no employees, but you can address that directly instead of giving free money to people buying lambos.

There is a silver lining, all that money went back into the economy somehow. It might have been worse if it had just sat in a bank.

Small-time crime porn masquerading as news.

The biggest criminals get away with their crimes. Joe Manchin and most of COTUS (and SCOTUS and POTUS) are overtly corrupt, but are the just the facilitators of centimillionaires and billionaires who extract money by fraud and corruption by making it both legal and normalized.

Why is this post flagged?

Ah yes, here it is, the "welfare queen" right wing trope, this time aimed at PPP fraud. The idea is that a small group of bad people did bad things and benefited from government provided social programs, and therefore you must take the benefit away from everyone.

It's pure propaganda.

And coming from the NY Post, I am not in the least bit surprised.

Is it bad that 17% of loaned PPP funds were based on fraud? Sure.

But that means 83% went to worthy recipients. Funny how their stories aren't getting told by the Post, though...

17% of 343 BILLION dollars is a wee bit more than just a write-off though don't you think?

Take a breath, re-read my comment, and see if you can recognize the point I'm making. I'll give you a hint, it's in the last sentence.

It's fraud and it's terrible but.. Another way of looking at this is that a lot of that $200B was likely put back into the economy. Would the government claw that back, for example returning the fancy car and demanding the cash back?

Broken window fallacy

Uh, no, absolutely not.

The broken window fallacy is about destroying value to create work. The point is that the result is a net negative for society.

This is a case of the government issuing debt to push money into the economy and keeping businesses afloat. Some of those applicants may have been ineligible fraudsters, but their spending those funds still results in that cash circulating in the economy.

Is that as beneficial as keeping a business afloat? No. But there's no reason to believe the result is a net negative.

> put back into the economy

oof is that the bar we want to set? spend it and you're fine

The money is long gone. The people can still go to prison.

Money put into cars and yachts, yes, mostly gone. But Real State surely can be recovered, and given the current market, probably at a premium.

Won’t some one think of the Ferrari dealers and mansion realtors!

>Another way of looking at this is that a lot of that $200B was likely put back into the economy

And put into relatively unproductive sectors like luxury goods. And taken from future American taxpayers, too. A truly collosal waste of limited resources.

'likely put back into the economy' is a terrible way of putting it. That wouldn't be a good explanation in front of a judge who sees my fancy car, paid by fraud. It also does not inspire confidence with how the government treats money. Why would I be willing to do honest work if society lives on broken ideals?

If the ppp was feasable, the government would have reserved money for solving these side-effects of their proposal.

Agreed. Thinking about WWII, the Allies did all sorts of awful things and made a lot of mistakes that cost the lives of innocents. But the overall goal was a much greater benefit than not acting at all.

How about we just don't take taxpayer dollars in the first place, if the government plans to do things like this with it? Don't need to add money to the economy if you don't take it away in the first place.

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