SPRINGFIELD, Ill. – Nearly 375 government workers in Illinois faced misconduct findings related to the federal Paycheck Protection Program, a protracted investigation by the state’s executive inspector general has revealed. These individuals either sought and obtained PPP loans they didn’t qualify for or failed to disclose side businesses they claimed were operating to secure the funds.
State Employees Caught in PPP Loan Misconduct
Nearly 375 Illinois government workers implicated in fraud tied to COVID-19 relief program.
How many Illinois state employees engaged in misconduct related to the Paycheck Protection Program? Nearly 375 workers across government agencies in Illinois were found to have engaged in misconduct concerning the federal Paycheck Protection Program.
The probe, initiated in 2022 by Executive Inspector General Susan Haling, scrutinizes wrongdoing by state workers and employees of certain local government agencies, including the CTA and PACE. Haling’s office reported Friday that out of 501 investigated cases of suspected PPP fraud, 373 individuals were found to have committed some form of misconduct.
For the year ending June 30, investigations into 54 workers were concluded. These cases involved approximately $1.19 million in questionable PPP loans, according to state records. Of these 54 employees, two were terminated, while the remainder resigned.
Did employees use brokers for fraudulent loans? Roughly half of the implicated workers confessed to paying an underground broker to submit falsified loan applications. They compensated these brokers with kickbacks ranging from $500 to $10,000.
One CTA bus driver recounted meeting his broker through a bowling league and paying $10,000 for $41,666 in illicit loans, as detailed in the state report. Other employees admitted to using tax preparers to complete fake PPP applications.
A bus driver for PACE, the suburban transit authority, acknowledged using most of her $20,000 in fraudulent loan funds for home improvements, including repainting her house and redoing her floors.
An employee with the Illinois Department of Corrections informed investigators that a portion of her loan proceeds was used to purchase a sport-utility vehicle.
While some state employees implicated in PPP fraud, including police officers, have faced criminal charges, these cases represent a small segment of those identified by investigators.
The same pattern holds true for the unofficial brokers who processed many of the fraudulent applications. Deborah Witzburg, the city of Chicago’s inspector general, has around 20 ongoing investigations into suspected PPP fraud involving city employees, according to her office’s most recent quarterly report.
The Paycheck Protection Program was established to aid business owners impacted by the pandemic, offering loans to help them remain operational. Eligible expenses included worker salaries and utility bills. These loans were forgivable, meaning recipients wouldn’t have to repay them, provided they attested to using the funds appropriately.
Widespread fraud followed the program’s rollout. Nationally, the PPP has been found to have suffered billions of dollars in losses due to individuals who applied for and received funds under false pretenses, such as inflating their businesses’ lost income figures.
