Both Wolverhampton and Sandwell councils have reported cases of fraud during lockdown.
While Dudley, Walsall and Stafford have not uncovered any in their boroughs, bosses said they have “zero tolerance” for fraud and will act swiftly if any cases are found.
In the worst hit area, Wolverhampton Council officers are investigating 19 cases – totalling just over £200,000 – where grants were handed out after the coronavirus lockdown was introduced in March. Authority fraud officers said some beneficiaries are suspected of either claiming to operate from empty properties or had given addresses where they previously traded from.
A report to the council’s audit committee this week said more than 4,000 grant applications were processed and £47 million paid out to help companies through the coronavirus crisis.
It also said 180 applications were rejected for reasons including ineligibility, failure to submit appropriate evidence and duplication.
As well as the 19 being investigated, a further 10 payments are currently being withheld as officers await further information from the claimants.
Audit bosses said they were confident of recovering money that should not have been paid out.
Principal counter fraud officer Mark Wilkes said: “The ones suspected of fraud were where previous tenants were actually applying for the grants.
“So, in certain cases businesses had moved out of premises and not told us and then applied for the grant.
“We either stopped payment or, if they did get through, we are looking at them and will get the money back.
“Others included empty properties where somebody tried to claim they were running a business from.”
Conmen in Sandwell tried to swindle £265,000 destined for businesses struggling with the lockdown – the majority of cases saw the money stopped before it was paid out, but in two incidents £35,000 was paid out to fraudsters.
A report to the council showed that up to last month, Sandwell has prevented 22 fraudulent claims for grants between £10,000 and £25,000 each.
A spokesman for Sandwell Council said: “The council is open to fraud and misappropriation due to changes in legislation and the speed in which government grants need to be validated and distributed.”
Dudley Council has supported nearly 5,000 businesses during the pandemic, and bosses said they have a “zero tolerance” policy towards fraud.
Stafford Borough Council has also not reported any criminal activity arising from the grants, but chiefs said they will take action if needed.