Clyburn Calls on SBA Inspector General to Investigate Duplicate PPP Loans
Washington, D.C. (June 23, 2020) — Today, Rep. James E. Clyburn, Chairman of the Select Subcommittee on the Coronavirus Crisis, sent a letter to Small Business Administration Inspector General Hannibal “Mike” Ware requesting an immediate review of an error at SBA that allowed many businesses to receive duplicate loans under the Paycheck Protection Program.
The Chairman wrote, “I am concerned that SBA may have issued more than a thousand duplicate loans, creating significant opportunities for fraud and potentially wasting more than $100 million in taxpayer dollars—money that was supposed to go to small businesses struggling to stay afloat during the pandemic.”
Reporting earlier this month revealed a systematic error “caused by a blind spot in the SBA’s loan processing system which failed to see when some borrowers submitted applications multiple times typically with several different lenders.” This error reportedly led to the issuance of at least 1,020 duplicate loans, amounting to roughly $116 million dollars based on average loan sizes.
“The Select Subcommittee requests your assistance to determine the scope of this problem and the steps SBA has taken to correct it and ensure that remaining PPP funds are allocated to businesses truly in need. SBA’s apparent failure to implement controls to prevent the duplicate disbursement of PPP funds may have led to the waste of millions of taxpayer dollars and opportunities for fraud.”
Earlier this month, the Select Subcommittee sent letters to the Treasury Department, SBA, and eight national banks seeking documents and information on the disbursement of PPP funds following reports that large banks created two-tier systems for processing PPP loan applications that benefit wealthy existing clients at the expense of truly struggling small businesses in underserved communities.
Last month, an investigation by the Select Subcommittee led to the return of $10 million to the Treasury from a publicly traded company that received a PPP loan just two weeks after paying $6.5 million to resolve allegations of defrauding the federal government.
Click here to read today’s letter to the Small Business Administration Inspector General Hannibal “Mike” Ware.