SBA Investigating $1.2 Trillion On Payments As Part Of Fraud Probe: Loeffler
Federal officials are reviewing approximately $1.2 trillion in payouts to root out fraudsters, according to Kelly Loeffler, administrator of the Small Business Administration (SBA).
“Federal contracting and the fraud that happens within it in Washington, D.C., around these programs are probably the worst kept secret in Washington,” Loeffler said during an interview with “American Thought Leaders” host Jan Jekielek.
She highlighted patterns of fraud impacting the government, including the widespread abuse of the SBA’s 8(a) business development programs that offer funding for small businesses, including education and child care organizations, revealed in Minnesota
“It’s a huge cost to the American people when these programs are defrauded,” Loeffler said. “So, we have a whole path, we’re cracking down on that.”
An investigation looking back 15 years will include audits—the first in the program’s 45-year history, according to the administrator.
Approximately 7,000 borrowers—representing about $400 million in fraudulent payouts—were suspended in Minnesota last year.
Fraud Spread Nationwide
Officials will next use the investigative framework “to go state by state” and identify illegitimate payouts that were “very much driven during COVID,” she said.
Businesses asked to reduce operations—or shut down entirely, in some instances—were negatively impacted during the pandemic, which Loeffler said necessitated federal intervention.
“It was devastating, and would have been even more devastating had that federal assistance not come out,” she said. “And most small businesses were legitimate and used it for good, kept their employees on the payroll, and made a huge difference locally.”
Others saw the influx of federal benefits as a chance to reap rewards, which, combined with limited oversight, led to widespread abuse of the program, she said.
“There’s a certain group of actors that saw opportunity in disaster and defrauded the government,” Loeffler said. “What we know now is they come back to the trough.”
President Joe Biden’s administration forgave thousands of loans that were flagged as potentially fraudulent, she noted.
“They were not ever further investigated,” Loeffler said. “Those cases were closed; those loans were being forgiven.”
Federal investigators are now reviewing each loan to determine if further action is warranted.
“No more sweeping this under the rug,” Loeffler said. “We’re going to hold people accountable.”
https://www.zerohedge.com/political/sba-investigating-12-trillion-payments-part-fraud-probe-loeffler