Home Business administration EIDL funds approved for non-qualifying businesses in adult entertainment, gambling – FOX23...

EIDL funds approved for non-qualifying businesses in adult entertainment, gambling – FOX23 News


A watchdog report calls for improvements to one of the government’s pandemic relief programs aimed at helping small businesses after results showed millions of dollars were approved for potentially ineligible businesses.

The U.S. Government Accountability Office (GAO) report states that the Small Business Administration (SBA) has made approximately 5,000 advances through the Economic Injury Disaster Loan (EIDL) program to ineligible businesses in industries such as adult entertainment, casino games and the retail sale of marijuana. of July 2020, which totaled approximately $ 26 million.

“We have observed companies that are in adult entertainment that by law are not allowed to be funded under this program,” said Bill Shear, director of the financial markets and corporate team. GAO community investment.

The report also states that the SBA approved at least 3,000 loans through EIDL to ineligible businesses such as real estate developers and multi-level marketers in September 2020, for a total of around $ 156 million. .

He also pointed out “strong indicators of fraud, such as loans going into potentially fraudulent accounts; loans to applicants with the same Internet Protocol address, email address, bank account, or mailing address.

Shear said the total number of potentially ineligible or fraudulent applications approved is still unclear as the review process is ongoing.

“It will probably be a very long time before we really know how many of those who got these loans were actually ineligible and how many committed fraud,” Shear said.

The GAO said the SBA has made some changes to address the issues, including measures to improve the ability of loan officers to withhold funding for applicants suspected of fraud.

But he said the SBA had failed to implement other recommendations previously made by GAO, including calling on the SBA to “perform data analysis across the EIDL portfolio to detect potentially ineligible applications and fraudulent ”.

Responding to the findings, the SBA said, “The SBA reported to GAO that the agency is developing an analysis to apply certain fraud indicators to all application data. The SBA is also working on a business approach to implement a comprehensive monitoring plan for EIDL COVID and ensure that a fraud risk assessment is performed and that fraud risks are monitored on an ongoing basis. “

Source link