A Small Business Administration program aimed at keeping entrepreneurs afloat during the coronavirus pandemic may have sent billions of dollars to scammers and ineligible applicants, according to a new watchdog report.
In a report released Wednesday, SBA Inspector General Hannibal “Mike” Ward said more than $ 78 billion in aid approved for businesses under the agency̵
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The report found that $ 58 billion was disbursed in multiple loans to companies that used the same IP addresses, email addresses, bank accounts or the same physical addresses. Approx. 13.4 billion $ Went to accounts that differed from those listed in the original loan applications, and approx. 1.1 billion $ Went to potentially ineligible businesses.
The fraud stemmed from the agency’s urgency to provide assistance to pandemic companies; To speed up the process, the SBA “lowered the railings,” Ward wrote, “which significantly increased the risk of program fraud.”
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Within a few days, the agency received an unprecedented number of loan applications: on March 31, it received 680,000 applications, the highest number ever received in a day. As of April 10, the agency had more than 4.5 million applications to sort through. To speed up the process, SBA employees were given an average of 15 minutes per week. Application to make their decision.
Under the program, companies could receive forgiving loans of up to $ 10,000. The agency distributed approx. $ 211 billion in loans during the virus-induced crisis.
But SBA administrator Jovita Carranza rejected the report, saying in a letter that it “overestimates the risk of fraud, waste and abuse” and indicated that it does not “fully and accurately portray the SBA’s highly successful delivery of an unprecedented amount of disaster relief.”
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