Financial technology services companies received billions of dollars through taxpayer-funded PPP loan processing fees with little oversight of who was getting the loans, House lawmakers allege.
David Spunt reports on estimated $100 billion in fraud casesissued during the coronavirus pandemic. , shows multiple financial technology companies, or fintechs, were either unable or unwilling to perform checks and balances on loans being issued. The result was the approval of large numbers of fraudulent applications – and untold tens of billions of dollars meant for struggling small businesses stolen.
"As today’s report details, many fintechs, while promising to help disburse billions of Paycheck Protection Program [PPP] dollars to struggling small businesses efficiently and expeditiously, refused to take adequate steps to detect and prevent fraud despite their clear responsibility to safeguard taxpayer funds.
Blueacorn, a company founded during the pandemic to help small businesses access PPP loans, received more than $1 billion in taxpayer-funded processing fees but spent less than 1% of its earnings on preventing fraud, investigators found. The company also pressured employees to spend less than 30 seconds reviewing loan applications, instructing workers, "the faster the better."
Companies like Capital Plus, Harvest, and other fintech-partnered PPP lenders admitted to having no formal program to oversee Womply and Blueacorn's activities.
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