Danielle Marsh was a graduate of the prestigious Horace Mann School, but that’s not where she learned how to defraud federal taxpayers by applying for and receiving more than $1 million in U.S. Small Business Administration (SBA) loans intended to help small firms suffering during the COVID pandemic.

“She explained that she learned how to scam the SBA by simply researching online and joining scammers’ groups on the app Telegram to get more ideas for scams and to find people’s personal information. In her words, ‘You can go on Telegram and join a group of scammers, and they’re all just bragging and sending pictures. You just put in the search for whatever you’re interested in. So say it’s SBA loans — you type in E-I-D-L or just S-B-A. And then there’s a bunch of chats of people just selling SBA information,’” Senate Small Business Committee Chairman Senator Joni Ernst (R-Iowa) told Government Accountability Office Acting Comptroller Orice Williams Brown in a June 2 letter obtained by The Washington Stand.

Ernst was referring to a 2022 New York Magazine article describing how Marsh, who came from a wealthy local family, ended up in the Empire State’s Rikers Island Prison as she descended into a life of crime.

The Iowa Republican, an Air Force combat veteran who is not seeking re-election in November, also pointed in a separate statement to other instances of fraudsters bragging and guiding on social media, and noting that such blatant wrongdoing is anything but rare because “online forums where criminals share how-to guides or other tips” are far too common:

• A freeloading TikTok creatorliving in the U.S. illegally gained a following, bragging about collecting government handouts and encouraging other migrants to “invade” America;
• An IRS employeewho stole more than $3.5 million from numerous government programs advertised her illegal pyramid scheme on Instagram; and
• A TikTokerwho went viral for a video explaining how to scam the Supplemental Nutrition Assistance Program now warns, “watch what y’all put on the internet because everything is not for the internet — and I learned that.”

As chairman of the Senate panel that deals with small business issues, Ernst’s focus is primarily on the SBA. The SBA is not among the largest federal agencies, but multiple recent GAO and SBA Office of Inspector-General (IG) reports document a deeply-embedded problem in the agency that almost certainly is to be found elsewhere in the federal departments and programs.

“The GAO and the SBA Office of Inspector General (OIG) have identified multiple SBA programs as high-risk for fraud and improper payments. For instance, the GAO reported that in Fiscal Year (FY) 2024, approximately 75 percent of the improper payment estimates stemmed from just five programs, including the SBA’s Restaurant Revitalization Fund (RRF), which accounted for an estimated $9 billion in improper payments. This means that more than 30,000 RRF awards, or 30 percent of total awards, were improperly paid out,” Ernst wrote.

“In a similarly situated program, GAO reported an estimated improper payment rate of 69 percent, totaling more than $10 Billion of improper payments within SBA’s Shuttered Venue Operators Grant (SVOG) in FY 2025.2 Additionally, in June 2023, the SBA OIG estimated that SBA disbursed over $200 billion in potentially fraudulent COVID-19 Economic Injury Disaster Loan (EIDL), Paycheck Protection Program (PPP) loans, EIDL Targeted Advances, as well as Supplemental Targeted Advances. In total, the OIG estimated that at least 17 percent of all COVID-19 EIDL and PPP funds were disbursed to potentially fraudulent actors. With such large amounts of improper and fraudulent payments, oversight is critical to prevent this from continuing,” Ernst continued.

As a result, Ernst wants GAO to dig into four aspects of what appears to be a government-wide problem, including the extent to which “fraudsters share and learn fraud tactics on the internet or other electronic forums, such as mobile apps, including the extent to which the tips work to receive fraudulent funding.” In addition, Ernst wants GAO to determine “what advice is typically provided on these web forums, and how does this system of criminal information sharing work, generally,” and “to what extent do SBA or other relevant agencies monitor the dissemination of fraud-promoting information, such as websites or messaging groups.”

Finally, Ernst expects GAO to come back with substantial recommendations on measures Congress can adopt “to shed light on criminal information sharing and prevent the collective conspiring to commit more fraud.”