February 05, 2026 | Posted By: Dave Scher

When the COVID-19 pandemic brought the American economy to a sudden halt in early 2020, Congress moved swiftly to provide emergency financial relief. The Paycheck Protection Program (“PPP”), authorized under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, was designed to help small businesses keep employees on payroll during unprecedented economic uncertainty. The program disbursed approximately $800 billion to more than 11.5 million businesses nationwide.

But with opportunity came exploitation. The rapid deployment of pandemic relief funds, distributed through private lenders with limited fraud prevention controls, created what investigators now call an “easy money” environment that attracted fraudsters on a massive scale.

The Scope of PPP Fraud: Staggering Numbers

The SBA Office of Inspector General estimates that at least 17 percent of all COVID-19 relief funds were disbursed to potentially fraudulent actors, representing approximately $64 billion in PPP fraud alone. When combined with fraud in the Economic Injury Disaster Loan (“EIDL”) program, total pandemic relief fraud may exceed $200 billion.

These aren’t just statistics—they represent stolen taxpayer dollars that should have gone to legitimate small businesses struggling to survive. The fraud schemes ranged from straightforward to sophisticated:

• Inflating payroll numbers and employee counts to qualify for larger loans
• Submitting applications for non-existent businesses with fabricated tax documents
• Using stolen identities and fake Social Security numbers to obtain multiple loans
• Claiming loan forgiveness while using funds for luxury purchases, vacations, and personal expenses
• Submitting multiple applications for the same business to different lenders

The Pandemic Response Accountability Committee identified questionable Social Security Numbers used to obtain $5.4 billion from SBA programs, highlighting the scale of identity theft involved in these schemes.

False Claims Act Enforcement: A Critical Recovery Tool

The False Claims Act (“FCA”), originally enacted during the Civil War to combat procurement fraud, has become the government’s primary weapon for recovering fraudulently obtained pandemic relief funds. The FCA imposes liability on individuals and companies that knowingly submit false claims to the federal government for payment—exactly what PPP fraudsters did when they submitted false loan applications and requests for forgiveness.

Record-Breaking Enforcement Activity

In fiscal year 2025, False Claims Act settlements and judgments exceeded $6.8 billion, the highest single-year total in FCA history. In fiscal year 2024, the government obtained more than 250 FCA settlements and judgments totaling more than $250 million for pandemic-related fraud, a dramatic increase from previous years.

Perhaps most significantly, whistleblowers filed 1,297 new qui tam suits in fiscal year 2025, breaking the previous year’s record and nearly doubling historical averages. This unprecedented surge reflects both the massive scale of PPP fraud and the effectiveness of whistleblower-driven enforcement.

Extended Timeline for Justice

Recognizing the enormous volume of fraud yet to be prosecuted, Congress extended the statute of limitations for PPP and EIDL fraud under the False Claims Act to ten years. This means fraudulent loans obtained in 2020 and 2021 can be pursued until 2030-2031, giving investigators and whistleblowers time to identify and prosecute complex fraud schemes.

As of early 2025, the enforcement effort is far from over. The Department of Justice maintains over 700 active civil cases related to pandemic-relief fraud, with new cases being filed regularly.

The Evolution of Whistleblowing: AI and Data Analytics

One of the most fascinating developments in PPP fraud enforcement has been the emergence of “data relators”—whistleblowers who use artificial intelligence, machine learning, and advanced data analytics to identify fraud by mining publicly available information.

How Data-Driven Whistleblowing Works

The Small Business Administration released PPP loan data to the public, enabling data miners to develop algorithms that scan the information and look for outliers or use artificial intelligence to uncover well-hidden fraudsters. These sophisticated techniques have proven remarkably effective at identifying fraud patterns that might otherwise go undetected.

Unlike traditional insider whistleblowers who report fraud within their own organizations, these data relators have no preexisting relationship with the defendants. They program algorithms to analyze publicly available PPP data and identify anomalies that may indicate fraud.

Landmark Cases and Multi-Million Dollar Recoveries

The success of data-driven whistleblowing is demonstrated by several high-profile cases. Delta paid $8 million to settle allegations it overcompensated its executives with PPP money.  Sidesolve, LLC, an AI/data analytics company, received a $1 million whistleblower bounty after settling a False Claims Act case for $9 million involving a national roofing company

Data miners are now developing algorithms to scan data and look for outliers, and some are using artificial intelligence to uncover well-hidden fraudsters. The techniques include:

• Identifying businesses that received multiple loans in violation of program rules
• Flagging applications with employee counts that don’t match payroll tax records
• Detecting patterns of suspicious activity across multiple applications
• Cross-referencing loan data with business registration records and other public databases
• Using machine learning to identify statistical anomalies indicating potential fraud

Why Data Relators Matter

With more than 11.5 million loans issued and more than 10.5 million forgiven, data miners have become necessary to bring PPP fraud cases. If the government relied solely on traditional insider whistleblowers reporting one or two fraudulent loans, only a tiny fraction of the estimated $64 billion in fraud would ever be recovered.

Over the last several years, a small number of data miners have done the work of hundreds, if not thousands, of traditional whistleblowers, identifying fraud schemes ranging from ineligible businesses to systematically inflated loan applications.

Broader AI Applications in Fraud Detection

The use of AI by whistleblowers extends beyond PPP fraud. In a recent California False Claims Act settlement, a relator used proprietary software implementing AI and machine learning to identify alleged fraud involving thousands of unpermitted home renovations. The relator’s AI technology scoured rental listing websites and accessed pre-renovation images from real estate websites to demonstrate the widespread nature of the alleged fraud.

This case demonstrates how whistleblowers use AI analyses to demonstrate the breadth of alleged fraud, rather than relying solely on a handful of representative examples, thereby making their complaints more compelling to government investigators and courts.

How Whistleblowers Are Compensated

The False Claims Act’s qui tam provisions provide powerful financial incentives for individuals to report fraud against the government. When a whistleblower (called a “relator” in legal terminology) files a successful FCA lawsuit, they can receive a percentage of the government’s total recovery.

These aren’t small amounts. In major cases, whistleblower awards can reach millions of dollars. The incentive structure is deliberately designed to encourage people with knowledge of fraud to come forward, even at personal or professional risk.

Who Can Be a Whistleblower?

Traditional PPP whistleblowers include internal employees or outsiders with inside knowledge.  But increasingly, data miners who manually review PPP loan data or develop algorithms to identify outliers have successfully brought cases, even without any insider connection to the defendants.

Current State of Enforcement

The criminal side of PPP fraud enforcement has been aggressive. As of December 31, 2024, 2,532 defendants have been found guilty of fraud-related charges involving pandemic-relief programs. Of those sentenced, 81 percent received prison time, with sentences ranging from one day to 30 years.  Additionally, 94 percent of sentenced defendants were ordered to pay restitution, although the amount recovered represents only a fraction of the total fraud.

Additionally, on the civil side, from March 2020 to December 31, 2024, the DOJ secured more than 650 civil settlements and judgments totaling more than $500 million to resolve allegations of fraud in pandemic-relief programs. Of 112 publicly announced closed civil actions reviewed, 58 were FCA actions initiated by whistleblowers.

The Work Ahead

Despite these impressive numbers, enforcement has only scratched the surface. The SBA Office of Inspector General has received more than 750,000 hotline complaints regarding suspected fraud, generating more than 90,000 actionable investigative leads representing an estimated 100-plus years of investigative work.

Government analysts have flagged hundreds of thousands of potentially fraudulent loans using automated screening tools. GAO analyses identified more than 3.7 million unique recipients with fraud indicators among 13.4 million total recipients, though these indicators require further investigation to confirm actual fraud.

How Hoyer Law Group Helps Whistleblowers Recover Taxpayer Dollars

At Hoyer Law Group, we understand that coming forward as a whistleblower requires courage and expertise. PPP fraud cases present unique legal challenges, from navigating the complexities of the False Claims Act to building a compelling case that withstands government scrutiny.

Our Expertise and Track Record

The team at Hoyer Law Group has proven experience handling False Claims Act cases involving pandemic relief fraud. We understand:

• How to identify viable fraud schemes worth pursuing
• The technical requirements for filing a successful qui tam complaint
• How to work effectively with federal investigators during the government’s review
• The nuances of whistleblower protections and anti-retaliation laws
• How to maximize your recovery while protecting your interests

Our track record speaks for itself. We’ve successfully represented whistleblowers in recovering millions of dollars in fraudulently obtained government funds, holding wrongdoers accountable while ensuring our clients receive the maximum compensation allowed under law.

The Bigger Picture: Protecting Taxpayer Dollars

PPP fraud isn’t a victimless crime. Every dollar fraudulently obtained is a dollar stolen from legitimate small businesses that desperately needed support during an unprecedented crisis. It’s money taken from American taxpayers who funded these relief programs.

Whistleblowers play an essential role in holding fraudsters accountable and recovering stolen funds. The False Claims Act’s qui tam provisions exist precisely because the government can’t detect all fraud on its own. Private citizens with knowledge of fraud, whether they’re insiders or data analysts, serve as force multipliers in combating government fraud.

By coming forward, whistleblowers don’t just earn financial compensation—they help restore integrity to government programs and ensure that relief funds go to those who truly need them.

Do you have information about PPP fraud? Contact the team at Hoyer Law Group. Our experienced False Claims Act attorneys work on a contingency basis; you pay nothing unless we recover funds on your behalf. Let us help you hold fraudsters accountable and earn the whistleblower compensation you deserve.