“The PPP also allows for the adding of employer contributions to retirement and insurance (only for employees and not LPs), so it is possible that these amounts could move the number up slightly, but again the firm can only claim 2.5 months of these amounts),” Beggs said by email.

Another RIA example cited by the study’s authors concerns a Phoenix-based SEC-registered firm with six employees that manages approximately $82 million in two investment companies. The firm received a PPP loan totaling $409,722.

“The firm indicated in the [Small Business Administration] data that it was retaining all six employees with the funds and used a PPP allocation that totaled $68,287 per employee,” the study’s authors said, adding that even if each of the firm’s six employees earned $100,000, the maximum PPP loan the firm should have qualified for was $125,000.

“By my math, the maximum PPP amount the firm would [have been eligible for] is approximately $600,000/12 * 2.5 or $125,000,” Beggs told Financial Advisor magazine. “That maximum amount could be greater if they had an affiliated firm they were borrowing to secure payroll for, but the data we received from the SBA indicated they had retained only six jobs with the proceeds.”

When contacted, an executive at the Phoenix firm, which asked to remain anonymous, said the payroll information the study used was inaccurate. “Using the total PPP loan amount and dividing it by the exact number of full-time employees at the time of filing is not the calculation that the SBA … used in determining the statutory loan amounts of the PPP program,” said the executive.

“The guidance describes payroll costs using calendar year 2019 as the reference period for payroll costs used to calculate loan amounts, [which is] missing from the researchers’ paper and conclusions they have come to,”

Financial Advisor offered the Phoenix firm the opportunity to provide its actual payroll data and calculations, but it declined.

“Our firm was in full compliance with the statutory limits and guidance,” the Phoenix executive said. “While we appreciate the researchers' tenacity to identify fraud and abuse in the PPP program, we suggest they read and fully comprehend the actual PPP guidance and the potential implications on the validity and efficacy of the conclusions they came to in their original paper.”

Beggs responded to the criticisms: “I think the odds that we systematically underestimated the amounts for all 299 abnormal loan firms is extremely low.”

The DOJ said it continues to aggressively pursue fraud cases against certain PPP loan takers. It has brought more than 475 PPP fraud cases and is seeking the return of an estimated $579 million in allegedly fraudulent loans. JPMorgan Chase, the largest lender by dollar amount in the program, also reported that it has been investigating customers and employees for PPP loan fraud.