By a team of 4 reporters @ POGO.org, Oct. 6

The Small Business Administration (SBA) flagged nearly 2.3 million Paycheck Protection Program (PPP) loans worth at least $189 billion — about a quarter of the roughly $800 billion lent out — for further review between August 2020 and September 2021, according to a massive dataset obtained by the Project On Government Oversight (POGO) through a Freedom of Information Act lawsuit. There are 4.3 million flags signifying concerns that loans were potentially fraudulent, the recipient was possibly ineligible, or the loans in question merited closer examination for some other reason. There is an average of 1.9 flags for each of the loans identified for scrutiny.

The SBA has forgiven 95% of all PPP loan dollars as of this month. That means a substantial number of loans flagged as potentially going to fraudsters or ineligible recipients have now been forgiven.

The agency first began retrospectively applying these flags in 2020 to help identify loans that should be more closely assessed before being forgiven. Indeed, the SBA dubbed the flags “hold codes,” and the codes were supposed to be cleared before the agency forgave the loans. Yet previously unreported auditor findings state that the SBA failed to ensure that all flagged loans and forgiveness applications were properly reviewed, raising the possibility that the government wrongly waived the repayment of tens of billions of dollars in PPP loans.

The data obtained by POGO appears to show mass close-outs of 2.7 million flags on two separate days near the end of the Trump administration. On a third day shortly before President Joe Biden’s inauguration, the SBA cleared out 99.1% of “special review” flags, almost entirely assigned to the very largest PPP loans above $2 million [....]

Government estimates of PPP fraud run as high as $100 billion [....]