Nov 03, 2020 06:35 PM EST
The Small Business Administration may have granted billions of dollars to fraudsters who made fake COVID-19 relief loans.
In a report published on October 28, the agency's internal watchdog said that the Small Business Administration has relaxed in response to an unprecedented amount of applications, causing it to grant billions of fraudulent coronavirus relief loans.
To keep up with the demand and fasten the loan approval process, the SBA "lowered its guardrails" during the economic disaster due to the COVID-19 pandemic, as per the agency's office of the inspector general (OIG). The act made a significant increase in fraud, according to HuffPost.
In early March, the SBA was authorized to provide loans of up to $2 million to small businesses, farms, nonprofits, and other eligible entities, after the U.S.government declared COVID-19 as a disaster.
The SBA received more than 14 million COVID-19 relief loan applications as of July 31, based on the report. The SBA has an average of about 65,000 applications per year prior to the pandemic. It approved 3.2 million applications or a total of $169.3 billion and disbursed 5.8 million COVID-19 relief grants costing $20 billion.
Among those loans, the SBA approved $14.3 billion to deferred accounts from the original bank accounts listed on the loan applications, wherein more than $13 billion of those loans were disbursed, the OIG stated.
The SBA also approved $63 billion in loans to applicants who used the same information - IP addresses, email addresses, mailing addresses, or bank accounts - for multiple loan applications. About $58 billion of those loans were disbursed, according to the OIG.
Besides, the SBA reportedly granted more than $1 billion on grants and loans to potentially ineligible businesses. The OIG said in its report that they recognize some of the loans in subgroups could be legitimate and for eligible companies. An example would be a law firm accounting filling out several applications for their clients.
However, the SBA must have had a more robust vetting process to research instances of suspicious activity or redundant data, the OIG reiterated. Several recommendations were made by the OIG to reduce the risk of fraud and recover funds disbursed to ineligible businesses, including having robust vetting processes to ensure loan deposits are made only to eligible bank accounts.
Fox7Austin reported that Jovita Carranza, SBA Administrator, took issue with the report's failure to indicate the enhanced and effective system validation and controls that SBA uses to process COVID-19 EIDLs" and claims many fraudulent applicants were decreased.
Carranza says, "The Draft Report does not fully and accurately portray SBA's highly successful delivery of an unprecedented volume of disaster assistance. Instead, the Draft Report grossly overstates the risk of waste, abuse, and fraud in the COVID-19 EIDL program."
Check these out:
One of the significant advancements is shifting the payment operations for remote workers. If the compliances are not met, it may lead to severe legal complications. The owner and organization may be held labially separately. The remote working lifestyle continuously grows and is a testament to becoming an endless working mode. Today we discuss components for payroll for remote workers
BRG International Founder Matias Alem had recognized this fact for a few years. So he remodeled his real estate brokerage into something completely new to solve the problem for his jet-setting international client base.
Ryan Early, hailed as 'Farmer Ryan' among sustainable agriculture experts, is a busy man. He has a laundry list of companies to his name, including Blue-Green Ventures, the company behind the revolutionary product, Blue MagicTM, a non-toxic and eco-sustainable pest preventative product using his patented BiomeMax TM Pheromonal Replication Technology.
Investor, financier, and expert in both cryptocurrencies and blockchain technology, Joy Mbanugo is the go-to in the sector. She has vast experience and knowledge across tax services, auditing, business operations, financial analysis, capital markets, and other specializations.
When Nick Collins was just 14 years old, he started his first business, which included around-the-clock phone calls and numerous questions from his parents. In fact, he began building his stout portfolio in the seventh grade by doing web design, incorporating creative content with brand strategies and plugging in a then-fledgling tech Flash.
Barry Gabster is the founder of InitiateU and is a leading proponent of the marketing mailer revolution, having already taken his company to 10x growth in 2021, alone. In fact, the exponential growth has seen the company rise from $800K-$8.5M just on word-of-mouth referrals.
If you think that the micro accounts are useful only for beginners who may not be able to cope with the fast dynamics of changing quotes on trading platforms, then this is not so. Professionalism grows out of these cent accounts.
Journalists love their jobs because they get to interact with people from all sorts of backgrounds and expertises, then turn around and share their knowledge with the world.
As the metaverse takes over more of our digital lives, the commoditization of all aspects of our virtual beings becomes more and more of a reality.