Whistleblowers could get up to $30,000 for information about COVID fraud

Whistleblowers who provide credible information about those who defrauded federal pandemic relief programs could receive up to $30,000 if criminal charges are filed against the alleged fraudster. 

The U.S. Small Business Administration, which oversaw the Paycheck Protection Program, COVID-19 Economic Injury Disaster loans and other relief, has stepped up efforts to recover more than $200 billion in stolen aid.

SBA is part of the new Fraud Whistleblower Incentive Program from the Department of Justice. The program offers cash rewards of between $10,000 and $30,000 for reliable tips that lead to indictment, plus additional payments after the alleged fraudster is convicted and sentenced.

Individuals, businesses and lenders "who know about fraud now have a direct, secure way to report it and help bring bad actors to justice," said Matt Coleman, head of SBA's Region 2, which includes Long Island.

"If you have information about PPP, COVID EIDL or other SBA program fraud, report it at america.gov/fraud," said Coleman, who lives in Nassau County.

At least 36 Long Islanders have been arrested in the past few years for bilking federal and state business-relief programs, according to a Newsday analysis of court cases.

More than $100 million was fleeced in 2020-23 from programs, such as the PPP, COVID EIDL, Employee Retention Credit and the $800 million COVID-19 Pandemic Small Business Recovery Grant Program, the analysis shows.

Last month, a former taxpayer from Freeport, Damaris Beltre, was sentenced to 4 years in prison after pleading guilty to orchestrating a scheme to steal $11.6 million from the PPP, COVID tax credits and other programs. The 59-year-old used some of the funds to buy a car, a house in the Dominican Republic and jewelry, according to a federal indictment.

In President Donald Trump's second term, SBA has identified $122 billion in possible pandemic relief fraud, referring $100 million in questionable PPP and COVID EIDL loans to the Internal Revenue Service for investigation and asked the Department of Treasury to pursue collection of an additional $22 billion in loan funds.

SBA also has suspended 870,000 borrowers from receiving future federal assistance because, as a group, they are suspected of stealing $39 billion in PPP and COVID EIDL funds, agency officials announced in September.

More than 75,000 of the suspended borrowers are based in New York State but SBA so far has refused Newsday's request under the Freedom of Information Act to release the identities of the borrowers.

Under then-President Joe Biden, SBA recovered nearly $80 billion in stolen PPP and COVID EIDL funds based on a June 2023 report from the agency's long-time inspector general, Hannibal "Mike" Ware. He also estimated 17%, or $200 billion, of the $1.2 trillion in approved pandemic loans were fraudulent. Trump fired Ware in 2025.

Kelly Loeffler, who was appointed by Trump to be SBA administrator, asked the public to help the agency pursue fraudsters. She said the america.gov/fraud portal and the financial incentives for whistleblowers "will deliver justice on behalf of honest business owners and taxpayers."

By James T. Madore

james.madore@newsday.comJamesTMadore

James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.