July 28, 2020 / 9:15 PM / 15 days ago

Internal watchdog sees signs of 'widespread potential fraud' in SBA disaster loan program

WASHINGTON, July 28 (Reuters) - The internal watchdog at the U.S. government agency responsible for managing COVID-19 emergency loans and grants to small business owners and nonprofits said it has found “strong indicators of widespread potential fraud” in the disaster loan program.

The Office of the Inspector General at the U.S. Small Business Administration (SBA) said it has been “inundated” with contacts to investigative field offices, receiving complaints of more than 5,000 instances of suspected fraud from financial institutions receiving economic injury loan deposits through the Economic Injury Disaster Loan and Advance grant programs, according to a public memo. (Reporting by Chris Prentice Additional reporting by Lawrence Delevingne Editing by Jonathan Oatis)

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