Here's a fun fact: the oldest verified human in history was Jeanne Calment, who died in 1997 at age 122. The current oldest living person is around 117.
Now here's a less fun fact: according to DOGE analysis, the SBA issued more than 3,000 loans worth $333 million to borrowers over 115 years old according to Social Security Administration records.
These aren't typos. These aren't edge cases. These are thousands of loans to people who, according to government records, would be among the oldest humans to ever live—if they were still alive at all.
Children Running Businesses?
The elderly loans are absurd enough. But DOGE also identified over 5,500 SBA loans totaling about $300 million that were disbursed to children under 11 years old during the same 2020-2021 period.
Let that sink in. Eleven-year-olds. Fourth and fifth graders. Kids who can't legally sign contracts, open bank accounts, or run businesses were apparently receiving six-figure government loans.
Some questions come to mind:
- How does an 8-year-old fill out a business loan application?
- What bank account did the funds go to?
- Who signed the promissory notes?
- How did no one at the SBA notice the birth dates?
The answer to the last question is simple: they didn't look.
The "Pay and Chase" Decision
These impossible loans exist because the SBA made a deliberate policy choice during COVID: remove fraud controls and approve as fast as possible. They called it "pay and chase"—distribute the money now, catch the fraud later.
The problem with "pay and chase" is that it assumes you'll actually catch the fraud. And chase the money. And recover it.
The SBA did none of these things effectively.
- $200+ billion in estimated fraudulent disbursements
- $30 billion recovered (about 15%)
- Loans to dead people, children, and fictional businesses
- Legitimate businesses denied while fraudsters got funded
- Zero senior officials held accountable
The Do Not Pay Database
Here's what makes this even more infuriating: the federal government has a database specifically designed to catch this kind of fraud. It's called the Do Not Pay System. It cross-references applicants against databases including:
- Social Security death records
- Incarcerated individuals
- Excluded parties (people barred from government programs)
- Delinquent federal debt
A June 2024 SBA OIG report found that SBA awarded and disbursed funds to potentially ineligible entities listed in Do Not Pay databases without sufficient evidence to support the loan decision.
They had the tool to catch loans to dead people. They just didn't use it properly—or at all—before approving billions of dollars.
How the Fraud Worked
So how do you get a loan in a dead person's name or a child's identity? The methods varied:
Identity theft: Fraudsters used stolen Social Security numbers belonging to deceased individuals or minors. The SBA didn't verify that the SSN matched a living adult.
Fabricated businesses: You can create a fake LLC in minutes online. Combine that with a stolen identity and you've got an "eligible" borrower.
Synthetic identity: Some fraudsters combined real and fake information—a real SSN from a child paired with a fake name and address.
Insider assistance: In some cases, people with access to SBA systems or partnered banks facilitated fraud. The $550 million scheme mentioned elsewhere involved a federal contracting officer.
They Knew This Would Happen
The SBA can't claim they didn't know removing fraud controls would result in massive fraud. Internal memos warned of it. The OIG warned of it. Fraud experts publicly warned of it.
They chose to do it anyway because:
- Speed looked good politically
- High loan volumes could be touted as "helping small business"
- Fraud would be discovered later—someone else's problem
- No individual would be held responsible
And that's exactly what happened. The fraud was discovered. It became someone else's problem. And no one was held responsible.
The Scale of the Fraud Crisis
The loans to supercentenarians and elementary schoolers are just the most absurd examples of a much larger problem. The SBA OIG estimated that the SBA disbursed more than $200 billion in potentially fraudulent loans through its COVID-19 relief programs.
To put that in perspective:
- $200 billion is more than the GDP of Hungary or Kuwait
- It's about $600 for every person in America
- It exceeds the annual budget of the Department of Homeland Security
- It represents approximately 17% of all COVID-19 EIDL and PPP funds disbursed
Seventeen percent. Almost one in five dollars went to potentially fraudulent recipients. And that's the SBA's own estimate.
Why Simple Checks Would Have Helped
You don't need sophisticated AI to catch loans to 115-year-olds. You need a basic database query:
"IF applicant_age > 100 THEN FLAG_FOR_REVIEW"
That's it. One line of logic. Same for children:
"IF applicant_age < 18 THEN DENY"
These aren't complex fraud detection algorithms. They're the kind of basic data validation that any competent programmer would include in a loan application system.
But the SBA either didn't implement these checks, or intentionally bypassed them in the name of speed. Either explanation is damning.
Where Did the Money Go?
The fraudsters who obtained loans in impossible names didn't stuff the cash under mattresses. Investigations have found the money went to:
- Luxury cars
- Real estate
- Jewelry and watches
- Cryptocurrency
- Overseas wire transfers
- Gambling
Some of it has been recovered. Most hasn't. The SBA and partner agencies have seized or recovered about $30 billion—impressive in absolute terms, but only about 15% of the estimated fraud.
The Recovery Problem
Why is recovery so hard?
1. The money moved fast. Fraudsters knew to move funds quickly before accounts could be frozen. By the time fraud was detected, money had often been spent or transferred overseas.
2. Shell companies everywhere. Many fraudulent loans went to LLC structures designed to obscure ownership. Tracing the actual recipients requires extensive investigation.
3. Cryptocurrency complicates things. Converting stolen funds to crypto makes tracking much harder, though not impossible.
4. Limited investigative resources. The SBA OIG simply doesn't have the staff to investigate millions of potentially fraudulent loans. As of January 2023, they had 536 ongoing investigations—for an estimated 2+ million potentially fraudulent loans.
5. International dimensions. Some fraud involved international actors or funds moved overseas, complicating jurisdiction and recovery.
The Extended Statute of Limitations
One positive development: Congress extended the statute of limitations for prosecuting PPP and COVID-19 EIDL-related fraud to 10 years. This gives investigators more time to pursue cases.
Recent arrests continue. In May 2025, 14 individuals were arrested in connection with a scheme that allegedly obtained over $25 million through SBA programs. Prosecutions will continue for years.
But prosecution after the fact doesn't bring the money back. And it doesn't help the legitimate businesses that were denied while fraudsters were funded.
- 10-year extended statute of limitations for prosecution
- 536+ ongoing OIG investigations (as of early 2023)
- New arrests happening monthly
- Average sentence: ~37 months in prison
- Most stolen money: never recovered
What Should Have Happened
Speed and fraud prevention aren't mutually exclusive. The SBA could have:
1. Used automated screening. Run every application against SSA death records, age verification, and Do Not Pay before approval. This takes seconds.
2. Implemented velocity limits. Flag applications coming from the same IP address, device, or bank account. Mass fraud operations often submit hundreds of applications from the same source.
3. Required identity verification. Even basic identity verification—matching a face to an ID—would have stopped loans to dead people and children.
4. Created cooling-off periods. Instead of instant approval and disbursement, build in a 24-48 hour review window for flagged applications.
5. Partnered with banks. Banks have sophisticated fraud detection systems. Use them.
None of this would have significantly slowed legitimate loans. But it would have stopped the most obvious fraud.
Know About COVID Loan Fraud?
The statute of limitations extends to 2030. Fraudsters can still be caught.
Report to SBA OIG