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NEWS AUGUST 10, 2020 ¦ 13

According to the report,
SBA approved 6,123 loans
totaling $208.1 million to in-
eligible businesses, and an
additional 20,692 advance
grants totaling $47.8 million
to potentially ineligible busi-
nesses.
What’s more, the OIG in-
vestigation also found the SBA
approved and paid at least 275
loans more than one time. Ap-
proximately $25 million of
the $45.6 million in approved
duplicate loans has been dis-
bursed.
“We verified the duplicate Cover page of the SBA Inspector General’s report.

approved loans were made to the same businesses at Some of the fraud schemes were initiated by or-
the same address,” the report said. ganized fraud rings that used social media sites to
In addition to the fraud scheme reported by the recruit applicants to split funds with the fraud ring
federal credit union, the report also highlighted that members. Other fraudsters used stolen identities or
a banking service provider identified $73 million in used online videos on social media that instructed
SBA deposits from about 3,000 suspicious transac- potential applicants how to answer certain questions
tions, and that a London-based international money to falsely obtain loans.
transfer business claimed to have identified $1.9 The OIG said it has identi-
million in pending SBA depos- fied internal control deficiencies
its being made to accounts to be within the loan program and
transferred internationally. The that the SBA did not have a pro-
OIG also noted that nine finan- cess or partnership in place with
cial institutions reported more financial institutions to review in-
than $187 million in suspicious stances of suspected fraud.
fraudulent transactions. Hundreds of institutions
express serious concerns In response to the OIG report,
“We are alarmed by these re- about suspicious activity the SBA said it has deployed so-
ports, but they are consistent with phisticated technology to create
our investigations, which indicate involving hundreds of a robust set of internal controls
pervasive fraudulent activity,” ac- millions of dollars. for the Economic Injury Disaster
Loans and Advances program.
cording to the OIG.
Examples of suspected “These internal controls have
fraudulent activity reported by rejected $9 billion in advances
credit unions and banks includ-
ed accounts opened with stolen and prevented the processing of
another $8.8 billion in duplicate
identities, account holders unable
to explain the origins of deposits or identify business advances,” the SBA said. “The internal controls
names on loans, or account holders attempting to have rejected $17.7 billion in loans and prevented
transfer the stolen funds from investment accounts the process of another $78 billion in duplicated
or foreign accounts. loans.”
¦

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