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12 ¦ AUGUST 10, 2020 NEWS

¦ From TRUMP on PAGE 11 suggested in a court filing this week that it has been
Join us. Join us. One nation. One nation. One peo- investigating Trump and his company for possible
ple. Enough is enough. Stop all of this,” he said. The bank and insurance fraud. Trump’s lawyers contend
Senate, voting largely on partisan lines, acquitted the subpoena is overbroad.
Trump at trial. Herschmann was among the lawyers with whom
Herschmann’s former firm, Kasowitz Benson William Barr said he shared concerns about the
Torres, represented Trump at the outset of the in- Russia investigation before becoming Trump’s sec-
vestigation into Russia’s interference in the 2016 ond attorney general. Barr, as a private lawyer, had
presidential election. The firm was among several in circulated a memo that trashed the special counsel’s
Trump’s orbit that received a government-backed investigation.
loan as part of the coronavirus relief package. That investigation is over, but Trump faces a series
The universe of former Kasowitz Benson lawyers of court fights in the coming months over his efforts
serving in the Trump administration is smaller than to conceal his financial records, including his tax
some other firms. A former Kasowitz Benson name returns. Trump was the first president in modern
partner, David Friedman, is now serving as the Sen- history to fail to show his tax returns to voters ahead
ate-confirmed U.S. ambassador to Israel. of an election.
Herschmann’s legal career included a stint, prior ¦

to joining Kasowitz Benson in 1996, as vice president C. Ryan Barber covers government affairs and
and legal counsel of Citibank N.A.’s investigations regulatory compliance for the National Law Jour-
department. He also earlier served as a prosecutor in nal in Washington. Contact him at cbarber@alm.
the Manhattan district attorney’s office. That office com. On Twitter: @cryanbarber

SBA Inspector General: Widespread Reports
of Fraud Tied to COVID-19 Loan Program

By Peter Strozniak

Hundreds of financial institutions have reported 59 appeared to be fraudulent, according to the OIG
more than 5,000 instances of suspected fraud report, which did not identify the credit union.
involving hundreds of millions of dollars After the Coronavirus Preparedness and Re-
stemming from a Small Business Administration sponse Supplemental Appropriations Act was
COVID-19 loan program, according to a new report signed into law last March, it authorized the SBA’s
released by the SBA’s Office of Inspector General. disaster assistance program to use available funds

“Nearly 440 financial institutions ranging from to distribute “economic injury loans,” and begin
small, local credit unions to major national institu- a new program called Economic Injury Disaster
tions have contacted us to express serious concerns,” Loans and Advances to respond to COVID-19 eco-
according to the OIG. “Our law enforcement part- nomic injuries.
ners report similar calls from financial institutions.” Approximately $374 billion had been allocated

In its 13-page report, the OIG highlighted that a for loans and grants through the SBA’s economic
federal credit union reported to the criminal division injury loan program. As of July 22, the SBA said it
of the Department of Justice that the cooperative re- has approved 2.8 billion loans totaling $160 billion
ceived $15 million in SBA deposits. The credit union and 5.7 million advance grants amounting to $20
audited 60 of the transactions and determined that billion.

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