How are others determining PPP loan fraud? Are you watching accounts and filing SARs on certain activity following a PPP loan? Are you looking at their files to know what they are supposed to be allocating it to (how many employees they have etc...)

I want to ensure we are doing what we need to but how would we determine funds are misappropriated when the rules on these are changing daily?

If an abuse is obvious the bank may consider a SAR, but it is the businesses responsibility to use the funds correctly to allow the funds to be eligible for forgiveness. Following a money trail could be quite involved and beyond the scope of a lenders responsibility. Some issues may be obvious while others require a lot of analysis. If the question is an ethical one, that may be for a court to decide and whether you'd use a SAR based on your observations is likely a case by case issue.

In the link below - "He spent the money on child support, a Rolex Presidential, a 5.73 carat diamond ring, and even leased a 2019 Rolls Royce Wraith," and "When he met with investigators last week, Fayne denied spending the loan on anything besides payroll and business expenses...Fayne's attorney Tanya Miller said there was 'considerable confusion' about PPP guidelines and over whether owners could 'pay themselves a salary' when asked about the charges by CNN."

https://www.dailymail.co.uk/news/ar...nt-emergency-loan-Rolex-Rolls-Royce.html

Wow, Andy thanks for sharing! That guy is a total dork.

that is nuts...

So many things I could type here; but I shall refrain. Insert forehead slap emoji here.

I can only imagine how many more of these types of incidents are taking place.

Not on the same level as a 1.5MM in jewelry, but we have a customer that appears to using the PPP funds for a 50k kitchen remodel. Still discussing how to handle the situation. We are waiting to see what kind of documentation he provides at the time he applies for forgiveness.

Another anon comments:

And I'm at the stage of wondering what we could or should suspect about the PPP loan itself, if the proceeds were taken out in structured cash withdrawals...

I mean of course, we have the SAR for structuring cash. But does that SAR mean we should have suspected shenanigans in progress with the PPP app or PPP funds too? Or would you wait till forgiveness to even consider that?

How are you keeping track of hundreds, if not thousands, of PPP loans?

I would say if something is suspicious, then file a SAR, but I am not here to babysit every customer to determine if they're using the funds for their intended purpose.

Providing an accurate calculation of the loan forgiveness amount is the responsibility of the
borrower, and Lenders may rely on borrower representations. Lenders are expected to perform a
good-faith review, in a reasonable time, of the borrower’s calculations and supporting documents
concerning amounts eligible for forgiveness. If the Lender identifies errors in the borrower’s
calculations or material lack of substantiation in the borrower’s supporting documents, the
Lender should work with the borrower to remedy the issue. The borrower shall not receive
forgiveness without submitting all required documentation to the Lender.

If the borrower can provide a 3rd party payroll and 941's to cover the PPP loan funds that is all that is required for verification. I would guess there have been many remodels and purchases as borrowers payroll has been covered for 8 weeks and well still in operation.