Fraudsters get billions of dollars in COVID-19 business loans

Fraudsters get billions of dollars in COVID-19 business loans

The Inspector General of Small Business Administration (SBA), according to the report, confirmed that the department could have distributed billions of dollars to fraudulent firms claiming financial distress due to the COVID-19 pandemic.

The report alleges that the SBA relaxed its vigilance to expedite the loan approval process and did not screen illegal applicants.

“To speed up the process, the management“ lowered restrictions ”and relaxed internal controls, which significantly increased the risk of program fraud,” the report said.

As of July 31, the SBA had committed $ 14.3 billion in COVID-19 Emergency Loans (EIDL) to accounts that were different from the original bank accounts specified in the loan applications; $ 62.7 billion in multiple COVID-19 EIDL applicants using the same IP addresses, email addresses, or bank accounts; about $ 1.1 billion in EIDL for COVID-19 and emergency advance grants to questionable businesses.

According to the report, in some cases the applicant made mistakes when filling out the application. For example, he indicated bank details in the bank account information field, or vice versa. The SBA received a huge number of applications and, thus, did not have enough time to review each of them.

“The SBA had to process an unprecedented number of applications. For example, on March 31, 2020, more than 680 thousand applications were received, this is the largest number that the SBA has ever received in one day, ”the report says.