The U.S. Small Business Administration (SBA) has announced a sweeping enforcement action targeting suspected pandemic-era loan fraud, referring more than 562,000 borrowers tied to $22.2 billion in delinquent loans to the U.S. Department of the Treasury for collection, according to the Small Business Association. The move marks the largest referral package in the agency's history and signals a major escalation in federal efforts to recover funds distributed through COVID-19 relief programs.

The loans in question stem from the Paycheck Protection Program (PPP) and COVID Economic Injury Disaster Loan (EIDL) initiatives, which were designed to support small businesses during the pandemic. According to the SBA, these loans had already been flagged for potential fraud in prior years but were not previously sent for collection or investigation.

Now, in coordination with the White House Task Force to Eliminate Fraud, the SBA has not only referred these debts to Treasury but also transmitted borrower information to the Department of Justice (DOJ) for potential legal action. Treasury's Bureau of the Fiscal Service will begin collection efforts immediately.