SBA Loan Frauds 2020 to 2021: What You Need to Know
The US Small Business Administration (SBA) has been offering economic stimulus programs to eligible business owners due to the COVID-19 pandemic. The stimulus payments given to American individuals and families under the CARES Act gave them a boost of much-needed financial support, and similar provisions under the CARES Act helped small business owners keep their doors open.
However, people have viewed the pandemic as an opportunity to commit fraud, and the Office of Inspector General (OIG) along with other federal agencies, such as the FBI, have taken notice. For quite some time now, white-collar crimes such as price gouging, stimulus check fraud, and, more recently, SBA loan scams, have affected countless Americans, which is why federal authorities are stepping in and trying to put an end to these offenses.
As such, it is critical to avoid committing these scams. Even circulating scams within your social group could put you on federal authorities’ radars.
The SBA does not initiate contact on either 7a or Disaster loans and grants. If you contact someone claiming to be from the SBA, you could get federal fraud charges.
If you contact someone promising to get approval of an SBA loan but require any payment upfront or offer them a high-interest bridge loan in the meantime, you could get suspected of fraud
SBA limits the fees that a broker can charge a borrower to 3% for loans $50,000 or less and 2% for loans between $50,000 and $1,000,000 with an additional .25% on amounts exceeding $1,000,000. If you attempt to charge more, you could face criminal charges
The SBA logo has been used for phishing attacks and scams, according to the OIG. Often, when a person sees the official-looking SBA logo, they automatically believe and trust that the SBA is actually contacting them. With SBA phishing scams, it is difficult for people to tell the difference between the real logo and the fake logo.
As such, if you commit a phishing attack/scam using the SBA logo, you could face trouble. Your intention may be to obtain a victim’s personally identifiable information (PII), obtain access to their bank details, or install ransomware/malware on another person’s computer.
In response to the wave of SBA loan fraud, the OIG advises applicants to verify that the email correspondence asking for PII includes the same application number as the actual application number. Any emails from the SBA come from accounts ending with sba.gov.
The OIG also warns that an SBA logo on a webpage does not always mean the information is accurate or produced by the SBA.
Penalties for Loan Fraud
Since SBA loan fraud is a federal offense, you could be subjected to federal penalties, accordingly. Mail and wire fraud are punishable by up to 20 years in federal prison and up to $100,000 fines. Not to mention, you may be ordered to pay victim restitution totaling the amount they lost from the crime. You could also get slapped with securities fraud charges based on the amount of money that was fraudulently obtained, which may be punishable by 5 years for each time this crime was committed.
Facing white-collar crime charges in Wisconsin? Our Milwaukee criminal defense attorney has insights into the other side of the system and can use this invaluable knowledge to enhance your defense strategy. To learn about your legal options, reach out to us online or at (414) 882-8382.