DALLAS (CBSDFW.COM) – The Paycheck Protection Program has reopened with $284 billion in new federal funds to aid struggling small businesses, but government watchdog groups worry the new round of COVID-19 relief loans could be plagued with fraud much like the initial round.

“Whenever there is free money on the table, there is going to be fraud,” said Tim Stretton, an analyst with Project on Government Oversight.

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Stretton said Congress did address some of the issues with the PPP, including adding more ongoing auditing of loans, however, he said more safeguards still need to be added.

Stretton said if the Small Business Administration crossed referenced to tax information with the IRS rather than relying on applicants to self-certify the accuracy of their own information, billions of dollars in fraud could potentially be prevented.

“It’s one small step that they could do to really help verify that this is an actual business,” he said.

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As business begin apply for the second round of COVID-19 relief funding, federal investigators continue to uncover alleged fraud from the first round of loans.

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Last week, Samuel Yates, 32, of Maud, was charged with PPP loan fraud after federal investigators said Yates sought millions of dollars in forgivable loans from two different banks by claiming to have 412 employees earning wages when, in fact, he had zero employees.

According to court documents, the first lender denied his request for a $5 million loan.

However, when he applied a second time with another lender, he received more than a half a million dollars in federal funds.

The CBS 11 I-Team reached out to Yates’ attorney for comment and has not yet heard back.

‘This Is Taxpayer Money’: Government Watchdogs Call For Safeguards To Prevent Further PPP Loan Fraud

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