Covid Loan Fraud Probes Turn to the Bankers Who Approved Them

The Justice Department has spent the pandemic years handily securing guilty pleas from small-time scammers who’d purchased luxury items using emergency relief loans.

Now comes the hard part: Finding lenders liable for rubber stamping fake loans made available under the more than $1 trillion in federal spending intended for struggling businesses.

DOJ’s Covid-19 fraud enforcement task force is shifting its focus to financial institutions in cases that will involve years of document-intensive review and interviews with industry insiders to uncover evidence that banks ignored obvious red flags, bypassed fraud-detection measures, or colluded with customers, attorneys say.

The government will have ...