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WASHINGTON—The federal government’s disaster loan and grant program for small businesses has been subject to more than 5,000 complaints of suspected fraud from lenders, a watchdog agency warned Tuesday as it called for closer oversight of the program.
The Small Business Administration’s inspector general’s office said it had been “inundated with contacts to investigative field offices from financial institutions across the nation and the complaint hotline” regarding the Economic Injury Disaster Loan and EIDL Advance grant programs. It urged SBA Administrator Jovita Carranza to take “immediate attention and action” to reduce or prevent additional losses to taxpayers.
Nearly 3,800 of the suspected fraud complaints came from just six lenders, the inspector general’s report said. Among them, nine financial institutions reported a combined total of $187.3 million in suspicious transactions. In addition, more than 1,000 complaints have been received through its complaint hotline.
Reported suspicious activities include accounts established using stolen identities, account holders unable to identify business names on loans or customers attempting to transfer funds into accounts located overseas or used for investment purposes.
