Vice President JD Vance announced that the federal government is permanently banning 870,000 people from receiving federal loans after they were identified as having defrauded pandemic-era small business programs, including the Paycheck Protection Program. Vance made the announcement at the FBI’s Kansas City, Missouri, field office during the first stop of a two-city tour that also included Kansas.
“If you screw the American taxpayer, the federal government is now going to say you’re cut off, no more,” Vance told a gathering of law enforcement and local officials. The PPP was created to help small businesses keep workers on payroll during the COVID-19 pandemic, but Vance said the program became a target for widespread abuse.
Operation No Doze Charges, $245 Million in Losses
Attorney General Todd Blanche said a summer enforcement push called Operation No Doze, running from mid-June through September 1, uncovered $245 million in losses and resulted in charges against more than 80 people. The operation involved more than 160 criminal defendants and was coordinated across more than 40 U.S. attorney offices, the SBA’s Office of Inspector General, and federal prosecutors nationwide. According to PPP fraud enforcement action, Vance said the partnership made nearly 90 prosecution decisions in just the past three months.
One Missouri case stood out. Blanche described how Jamie W. Gray allegedly attempted to steal more than $55 million by filing for hundreds of PPP loans while claiming to own dozens of businesses that were operating before the pandemic. “But in every instance but one, these businesses didn’t even exist,” Blanche said. The one real business Gray claimed to own, a Texas company called Fur Lives Matter, had no knowledge of him, Blanche added. Gray was indicted on money laundering and wire fraud charges.
Demand Letters Headed to Missouri and Kansas
William Kirk, inspector general for the Small Business Administration, said a national program will launch Tuesday, with demand letters going directly to suspected fraudsters in Kansas and Missouri. “It does not matter when the fraud happened. If you stole from the taxpayers by claiming any SBA loan that you are not entitled to, answer the demand letter you’re going to receive from the SBA,” Kirk said. “If you do not, you will face consequences. We know who you are and where you live.”
In Kansas, U.S. Attorney Ryan Kriegshauser announced that four people in the state were charged with PPP-related fraud, with losses totaling about $182,000. Blanche said the era of Washington overlooking pandemic fraud is finished. “We’re charging more defendants. We’re convicting more. We’re taking the money back,” he said.
Appeals Process and What Comes Next
Vance noted that the 870,000 people flagged for loan bans were identified as having a high likelihood of fraud based on other actions, and he acknowledged that errors are possible. A review process has been put in place for anyone who believes they were wrongly labeled. “We certainly appreciate that some people, you know, mistakes sometimes happen. So we’ve set up a process to ensure that people can actually challenge whether they’ve been accurately tagged as a fraudster,” he said.
The PPP began issuing loans in 2020 under President Donald Trump and issued a second round in 2021 under President Joe Biden. Vance criticized the Biden administration for not moving sooner on anti-fraud enforcement, calling the problem an “open secret.” Federal officials indicated Monday that enforcement actions will continue expanding beyond the summer operation.
