More than 1,000 federal COVID-19 relief loans for struggling businesses went to city of Chicago employees. And while the city’s Inspector General said in a recent report that some of the loans had been obtained legitimately, a substantial number of the identified loans have indicators of potential fraud. 

Chicago City Hall Inspector General Deborah Witzburg said her office examined more than 350,000 federal COVID-19 loans approved in the Chicago area. Of those, she found more than 1,000 loans that city employees got from the Paycheck Protection Program and Economic Injury Disaster Loan Program. Disciplinary proceedings have started against a Streets and Sanitation Department worker who allegedly falsified tax records and reported fake business income for a hair salon.

Hundreds of state employees in Illinois have allegedly committed fraud by improperly obtaining federal pandemic business relief loans. So far, the State Inspector General’s Office has referred 177 cases to law enforcement, with an investigation that began last year focusing on loans of $20,000 or more from the federal Paycheck Protection Program.