FRAUD_PRONE_INDUSTRY_ANALYSIS
├─ industries_tracked 18
├─ loans_in_sample 1,000
├─ total_funding $13.2M
├─ flagged_loans 0
└─ flagged_value -
What is this
Analysis of PPP loans in industries with historically high fraud rates. These NAICS codes appear frequently in DOJ prosecutions and OIG reports. High fraud rates in these industries are driven by cash-heavy operations, ease of falsifying payroll, and limited documentation requirements for small businesses.
| NAICS | Industry | Loans | Total Amount | Flagged | Flagged Amount | Flag Rate |
|---|---|---|---|---|---|---|
| 445120 | Convenience Stores | 1,000 | $13.2M | 0 | - | 0.0% |
| Total | 1,000 | $13.2M | 0 | - | 0.0% | |
Why these industries
Cash-heavy operations
Restaurants, bars, salons, and gas stations handle significant cash, making payroll inflation easier to hide.
High employee turnover
Industries with seasonal or temporary workers make it difficult to verify employee counts retroactively.
Limited documentation
Small businesses in these sectors often lack formal HR systems and payroll records.
DOJ prosecution patterns
These NAICS codes appear disproportionately in federal fraud prosecutions and OIG reports.
Methodology
Analysis based on sample of up to 50,000 PPP loans in tracked NAICS codes. Flag rate calculated as percentage of loans with automated fraud indicators (high dollar-per-employee, round amounts, timing patterns). Industry classification based on self-reported NAICS at time of loan application.