Millions of COVID-19 rescue dollars scammed, and these North Texas victims explain how
The goodfellas would be proud. It’s probably one of the biggest heists in American history.
I’m referring to the billions of dollars given out this year in Small Business Administration government loans to businesses and individuals to offset COVID-19-related closures.
I’m not talking about honest recipients. These are billions stolen by crooks in identity theft scams, as well as money given to businesses that didn’t deserve it or, when they got it, spent it badly.
You watch it in real time, right in front of your eyes.
And this is about to happen again as more money can be distributed.
The watchdog heard from North Texans who fell victim to these loans. I have heard how others take money on their behalf. I’ll show you how the scam works, how you can prevent it, and what to do if it happens to you.
Start with a credit check
Pam Rogers received a text message showing that someone had checked her husband’s credit history. “I found it strange because we didn’t ask for anything,” she says.
She saw it was the SBA. She called and learned that two different parties had requested $ 57,000 on behalf of her family. She spoke to an investigator who told her there were thousands of similar cases.
The loans have been blocked. “Our lives and our credit would have been destroyed,” she said.
Individuals and families are in desperate need of help. Certainly, most beneficiaries need these documents urgently.
What bothers me is our government’s monumental incompetence in protecting decent people from scammers and companies who selfishly grab funds and then spend them badly (by buying shares in the company, for example) .
Closed business? So what
Retiree John Childs owned Circle C Energy, but closed it six years ago. He also closed his bank account. Recently he received a letter from the SBA regarding his loan of $ 21,000. What loan?
The money from Circle C was sent to the scammer. Childs contacted the SBA fraud department. “Of course, all you can do is fill out forms,” he says. “You can’t talk to a real person. He received another letter saying he owed money. He filled out more forms.
It was an important week in the history of the corona breaker. A federal judge has ordered the SBA to release a complete list of beneficiaries of the paycheck and economic disaster loan protection program. Newly published data is on home.treasury.gov. Another way to find it: go to https://www.sba.gov/about-sba/open-government/foia and scroll down to “Frequently requested recordings”.
A lawsuit filed by 11 media outlets, some of which also asked for money for a loan, challenged the SBA’s attempt to keep the entire list secret. The SBA argued that disclosing everyone’s loan information would hurt business competition and could embarrass beneficiaries.
Federal Judge James E. Boasberg ruled that privacy concerns were not as important as eradicating fraud.
The list was posted on Tuesday showing all the loans but I ran into some issues. Not all data appears to be included. (Note: A previously published list only gave data on loans over $ 150,000.)
The real benefit of leaving the full list is not to embarrass but to find fraud.
In a statement, the SBA hailed the “historically successful” COVID relief programs that have helped millions of small businesses and tens of millions of American workers when they needed it most.
On the other hand, so far at least 73 people are accused of theft. That’s a drop in the bucket of the $ 525 million loaned to 6 million businesses. Investigations are continuing.
Part of the problem is that the paperwork for obtaining economic disaster loans was much easier than the normal SBA requirements. This is how Congress wrote the law and how the Treasury Department made the rules. Requests for paperwork were minimal and proper verification was not required. This made it easier for honest people, but also for crooks.
Loan Coupon Book
Chris Taylor received an unexpected payment coupon booklet from the SBA showing that he had taken out a loan of $ 9,500. Only his first name was on it, not the last. Weird. She contacted the SBA fraud department, the Texas attorney general’s office, and her county sheriff. Then she put a fraud alert on her credit report. “This nightmare continues. I still don’t have a resolution from the SBA, ”she said.
Federal law enforcement is investigating the fraud tricks, the SBA said in a statement.
“Evidence of waste, fraud and abuse with any of the SBA loan programs is not tolerated and should be reported,” SBA spokeswoman Nina Ramon told me.
The SBA’s internal watchdog cited “strong indicators of widespread abuse and fraud.” He released a report showing that billions of dollars were approved for distribution to potential criminals, but not all were distributed.
Businesses that did not qualify received loans. Some were pop-up companies created just to get money. Others already owed the government money.
“The SBA has now approved and disbursed more loans for COVID-19 assistance than all other disasters combined in the agency’s history,” the SBA noted. As loan applications came in by the millions, loan officers generally had very little time to devote to each loan.
Patrick Carew understood how the scam was committed. His crook opened a bank account in Carew’s name using stolen information. The scammer asked for a debit card. Then the scammer applied for the disaster loan, which didn’t require as much paperwork as the payday loan. He or she requested a direct deposit into the new account.
The scammer also filed a change of address form at the post office so that Patrick’s mail would go to the scammer. Once the loan money and the debit card arrived, the scammer could use the card for cash advances and purchases.
Carew says the mailing address change verification form comes with discount coupons, which is confusing, so don’t automatically throw it away. When the debit card came to his house instead of going to the scammer’s address, “I thought the debit card was a credit card offer. Instead, it was the actual map.
Amount of loan subscribed in his name: $ 77,000. But the money was never sent because Carew was careful, acted quickly, and blocked it. “I’m lucky it wasn’t worse,” he says. “It was by chance that I saw the debit card and thought enough about it to investigate, connect the dots and stop the fraud.”
Now, with more money that may go to the Americans, it’s back.
PERSONAL NOTE: Spend an hour with me on Zoom as I talk about Amun “Mr. Fort Worth” Carter and his decades-old battle with Dallas. I will tell stories from my award-winning play and accompanying book, HAS MY ! The ultimate texan. My fun talk, hosted by the Dallas Public Library, starts at 1 p.m. on Saturday, December 5th. Free registration is at https://bit.ly/amon-in-dallas.
Report fraud to the Small Business Association
The SBA has stopped receiving email complaints.
Call the SBA hotline at 800-767-0385. www.sba.gov/oig/hotline.
Or send a complaint by mail to: Office of Inspector General, 409 Third St. SW, Suite 7150, Washington, DC, 20416.
Contact the bank concerned immediately. Consult your credit report for free on annualcreditreport.com/index.action. As a preventive measure, consider a security freeze on your credit.
Become a citizen of Watchdog Nation. Join Dave Lieber and learn how to be a super consumer.
Watch this free training video from Dave: https://youtu.be/uhUEUCNKGjc
Subscribe: PLEASE support The Watchdog’s straightforward journalism brand designed to save you time, money, and aggravation. Treat yourself to a DallasNews.com full digital subscription.
Or use my special Watchdog code: https://dmn.pub/WATCHDOG
NEVER MISS The guard dog OF THEM reports every week. Register now here.
Surveillance bulletin: Sign up for The Watchdog’s FREE weekly newsletter to follow: Click here.
Watchdog history page: You can’t afford to miss The Watchdog. Always follow our latest reports on The guard dog home page.
Do you use facebook? Connect with The Watchdog on our Facebook group. To research “Dallas News Watchdog Posse.”
The morning news from Dallas The Watchdog column is the 2019 winner First Prize for Writing Articles from the National Society of Newspaper Columnists. The contest judge called her winning entries “models of storytelling full of suspense and public service.”
Read his winning columns: