The Small Business Administration’s office of inspector general launched numerous investigations after receiving more than 1,000 hotline complaints about potentially fraudulent transactions, according to a report released Tuesday. It also criticized the agency for allegedly failing to put in place internal controls to prevent abuse.
Among the potentially fraudulent transactions detailed in the report are $1.9 million in pending SBA transactions made to accounts outside the United States, roughly 3,000 “suspicious” transactions worth $73 million that were flagged by a banking service provider. A credit union told the Justice Department that 59 out of 60 SBA deposits it received appeared to be fraudulent.
“We are alarmed by these reports, but they are consistent with our investigations, which indicate pervasive fraudulent activity,” the inspector general wrote.