The issue involved the Economic Injury Disaster Loan Program (EIDL). EIDL is an initiative dating back to the Trump administration that provides grants and other financial assistance to struggling small businesses. Ultimately, he overwhelmed the agency, which had more than 27.8 million applicants seeking funding for his SBA and was tasked with overseeing the enormous emergency spending that overwhelmed the annual budget.
Congress has asked the SBA to only pay EIDL aid to businesses affected by the pandemic and located in the United States or its territories. But the influx of applications from foreign sources still flooded the agencies for the life of the program, and the SBA repeatedly appeared to fund them anyway.
The SBA has awarded a total of 41,638 awards totaling $1.3 billion to applicants who sought its assistance using computers believed to be located overseas, according to the SBA Inspector General. The watchdog said some applications came from countries deemed “high-risk” and had to be blocked entirely. More than $14 million in her EIDL aid was paid to applicants from these unnamed countries, according to research.
In many cases, new reports attribute the potential theft to poor surveillance and flawed technology. According to the Inspector General, this included a system for receiving and reviewing applications designed and maintained by an unnamed outside contractor, but as intended, it could be problematic. Could not block one foreign application.
To make matters worse, the watchdog specifically said it may have been stolen by an “international criminal organization,” and investigations are underway to find some of these malicious actors. It was pointed out that
Covid money trail
It was the largest surge in emergency spending in US history. For two years, six laws and more than $5 trillion were aimed at breaking the deadly hold of the coronavirus pandemic. While this money has saved the U.S. economy from ruin and vaccinated millions of weapons, it has also introduced unprecedented levels of fraud, abuse, and opportunism.
The Washington Post is following the covid money trail to figure out what happened to all this cash in a year-long investigation.
read more
SBA did not immediately respond to a request for comment. In an official response to the Inspector General, included as part of the report, the agency said $1.3 billion in questionable funds was less than 0.04% of the total $342 billion approved for EIDL.
SBA leaders also pointed to the fact that they blocked access to online application portals from foreign sources “millions of times.” Otherwise, agency officials said they would consider the award for potential abuse.
The OIG declined to identify the contractor that helped SBA create its system. The oversight agency said in its report that Americans living abroad, or companies with certain ownership interests in U.S. companies, may qualify as long as they meet other criteria, so all foreign It warns that the application is not necessarily fraudulent.
Nonetheless, the findings add to the myriad of headaches facing the SBA, which has been tasked with managing over $1 trillion in aid since the start of the pandemic. The agency’s efforts over the past two years have prevented countless businesses from completely shutting down, contributing to a swift and astonishing recovery in a free-falling economy. But it also comes with significant risks of waste, fraud and abuse, the results of which were revealed in his year-long investigation by The Washington Post.
Many of the suspected SBA thefts targeted the Paycheck Protection Program, which provides unforgivable loans to businesses. Both PPP and EIDL date back to the Trump administration.
For EIDL, for example, Congressional investigators found that 1.6 million of the 3.9 million loan applications received by the program this summer, or 41 percent, were “probably approved without actual review by SBA employees. I discovered that there is a possibility. Earlier, an SBA inspector general found that the SBA had given her EIDL funds to criminals who had applied using stolen IDs, he reports The Post.
SBA has also faced criticism for how it supports other initiatives, such as programs for closed concert halls and other performance venues. A portion of these funds will go to companies associated with Live Nation Entertainment. It’s an industry giant, and some members of Congress have said they don’t intend to profit from the law.
fix
A previous version of this article incorrectly listed the total amount of funds issued by SBA to foreign applicants. The amount was his 0.04% of total funds, not 0.4%. Fixed the article.
