Not only that but technically you were only able to apply for PPP if your company existed before February 15th, 2020, to explicitly prevent this sort of behavior.

How would that work? Collect PPP and use it to pay yourself salary? I thought you had to show the people were already employed and paid when you apply. I'm sure it was a mess though.

Sole proprietors were eligible for PPP to cover lost income but it was based on previous years Schedule C so first year business owners likely couldn't apply

That is if you assume people played by the rules, and there was actually validation controls in place

from what I have seen of the PPP and other covid programs the concern was getting the money out as fast as possible not validating claims. There was a SHIT ton of fraud... most of which will never be discovered

Your hypothetical scammer just got $20,000 deposited into their bank account. I don't think adhering to the letter of the loan, and repaying it, is a huge concern of theirs. Withdraw it all, and go live somewhere cheap for a couple years.