Financial technology firms at the front lines of approving loans through the Paycheck Protection Program — intended to help small businesses survive during the pandemic — lacked fraud controls, chased high fees to the detriment of some borrowers and sometimes exploited their business relationships to arrange suspect loans for the companies’ own executives. One such executive falsely claimed in loan documents to be a Black veteran and received loans through multiple business entities.
These are among the findings in a report released Thursday by the House Select Subcommittee on the Coronavirus Crisis, which investigated the role financial technology firms, known as fintech companies, played in propagating PPP loan fraud. The committee referred its findings to the Department of Justice and to the Small Business Administration’s Office of Inspector General.
“Even as these companies failed in their administration of the program, they nonetheless accrued massive profits from program administration fees, much of which was pocketed by the companies’ owners and executives,” said Rep. James Clyburn, D-S.C., the subcommittee’s chairman, in a statement released with the new report. “On top of the windfall obtained by enabling others to engage in PPP fraud, some of these individuals may have augmented their ill-gotten gains by engaging in PPP fraud themselves.”
www.propublica.org/article/ppp-loans-paycheck-protection-fraud-profits-report
h/t Boo_Randy