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Home / Business / Watchdogs saw a large number of potential loan frauds on SBA, sparking a fight with agencies

Watchdogs saw a large number of potential loan frauds on SBA, sparking a fight with agencies



But SBA administrator Jovita Carranza rejected the report, saying that the findings and data were “based on sloppy, incomplete conclusions.” From the standpoint of the investigation, the inspector general pointed out that $450 million of the 15,000 fraudulent loans that had been confiscated was determined by the agency, and the agency also decided to dismiss employees and contractors involved in approving loans to themselves or improperly influencing loan approvals Quotient.

The Inspector General said in the report: “Despite a lot of evidence to the contrary, the management of SBA insists on sound control measures.”

; “Our analysis of SBA’s Covid-19 EIDL loan and application data highlights Covid-19. A strong indicator of ongoing fraudulent activity in the EIDL program.”

The dispute is the latest example of a conflict between the SBA and federal oversight officials. In recent months, the agency has also battled with investigators from the Government Accountability Office and journalists seeking to disclose recipients of federal loans.

During the pandemic, the SBA has approved US$192 billion in so-called EIDL loans and US$20 billion in related disaster grants. In addition, according to the “Wage Protection Plan” enacted by Congress in March, it issued $525 billion worth of forgive loans. For agents, this is an unprecedented level of activity.

Although some fraud is expected, Ware said that a greater degree of fraud may occur during the pandemic. Ware said at a meeting hosted by the US Government Guaranteed Lenders Association on Wednesday that he believes SBA loan fraud is “beyond normal levels” and is “the focus of contention when I discuss with the agency.”

He said: “I keep saying this is just the tip of the iceberg.”

In Wednesday’s report, the inspector general blamed the SBA and the contractors used to implement the EIDL plan. The inspector general stated that the SBA team will approve the batch of loans after the subcontractor’s review, and “almost no review of loan information”. SBA initially set a goal for loan officers to make final loan decisions on at least four applications per hour, and the subcontractor’s system does not always flag duplicate loans.

Investigators found that fraudsters understand that sending “show” apps increases the likelihood that one or more apps will be implemented through the agency’s protective measures. One applicant filled out 38 applications that were marked as potentially problematic, but at least two of them were paid $384,600. One IP address used by the applicant was used for 245 approved loans. One email address has 158 loans approved.

The inspector general stated that the SBA had agreed to make some changes to its operations, and Carranza rejected the findings in a letter to Ware.

She said that the inspector general “has largely failed to investigate whether the “potentially fraudulent loans” raised more than the suspicious minimum.” She said that the example of shared IP addresses and email addresses in the report involved loan applicants They rely on certified public accountants, law firms, loan packaging companies or religious and cultural centers to submit loan applications.

She said: “​​The SBA’s analysis severely undermined most of the findings in the draft report and showed that the draft report severely exaggerated the extent of the “potential” fraud of the Covid-19 EIDL.


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