WASHINGTON, D.C. — The U.S. Small Business Administration is deploying Palantir Technologies software to expand its search for fraud in pandemic-era loan programs, using artificial intelligence and large-scale data analysis to identify cases for investigation, collection and potential prosecution.
The initiative formalizes a pilot program launched earlier this year and targets suspected abuse in the Paycheck Protection Program and COVID Economic Injury Disaster Loan program.
Palantir’s software will analyze SBA datasets for anomalies, coordinated activity and other indicators of potentially fraudulent applications. The agency plans to use the results to generate investigative leads and identify funds for possible recovery.
The SBA is coordinating the effort with the White House Task Force to Eliminate Fraud, the U.S. Department of Justice, the SBA Office of Inspector General and other law enforcement agencies.
Administrator Kelly Loeffler characterized the technology as a way to accelerate enforcement and improve controls over taxpayer-funded programs.
“No amount of fraud is acceptable — whether it is $10,000 or $10 million,” Loeffler stated. “The SBA is deploying these tools to accelerate our work to surface wrongdoing and ensure those who cheated taxpayer-funded programs face consequences.”
The agency contends that fraud may account for as much as 20% of more than $1.2 trillion distributed through federal pandemic relief programs. The release did not identify the methodology or source supporting that estimate.
The SBA has suspended more than 150,000 borrowers in five states over suspected fraud involving more than $10 billion in pandemic loans. A suspension blocks borrowers from receiving future SBA small-business and disaster loans and from participating in programs including the 8(a) Business Development Program.
California accounts for the largest portion, with 112,000 suspended borrowers tied to $8.6 billion in suspected fraud. The agency also identified 27,000 borrowers in Ohio connected to $1.1 billion, 6,900 in Minnesota linked to $400 million, 1,500 in Maine associated with $93 million and 7,800 in Wisconsin tied to $375 million.
The figures represent suspected fraud and do not establish criminal liability.
The SBA has also referred more than 560,000 borrowers associated with $22 billion in pandemic-era loans to the U.S. Department of the Treasury for collection, describing the action as the largest referral package in the agency’s history.
The Palantir deployment expands the government’s use of data analytics in recovering pandemic relief funds, while placing greater weight on automated systems to determine which borrowers receive additional scrutiny.
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