Beware Of SBA Loan Scams, Government Officials Warn

Charlotte, NC -- Press Release: Wednesday, May 13, 2020 U.S. Attorneys » Western District of North Carolina » News Department of Justice U.S. Attorney’s Office

Beware Of SBA Loan Scams, Government Officials Warn

CHARLOTTE, N.C. – Government officials issued a warning today, to alert the public about potential fraud schemes related to economic stimulus programs offered by the U.S. Small Business Administration to assist small business owners during the COVID-19 pandemic.

Andrew Murray, U.S. Attorney for the Western District of North Carolina, John A. Strong, Special Agent in Charge of the FBI in North Carolina, and Kevin Kupperbusch, Special Agent in Charge of the Small Business Administration, Office of the Inspector General (SBA-OIG), Eastern Region, made the announcement today.

“During these unprecedented times, when small business owners impacted by COVID-19 are doing their best to keep their businesses afloat, it is easy to fall prey to scammers. We advise everyone to remain vigilant in safeguarding their personal and their business information, and to be particularly discerning of emails or other solicitations related to economic relief programs.  As always, we are working in coordination with our law enforcement partners to identify fraudulent schemes and to bring scammers to justice, but the best first line of defense is for the public to exercise extreme caution before divulging important information to those who may be using economic relief programs as an opportunity to commit fraud,” said U.S. Attorney Andrew Murray.

“While American small business owners and employees are struggling, fraudsters are busy trying to steal the money meant to help those families survive. With billions of dollars in aid available, they will try every trick in the book to rob the rightful recipients of those funds. The FBI along with our partners are working every day to keep Americans safe during this unprecedented time. We want to remind everyone to go to official sites for information and never trust a text, email, or phone call promising a deal that sounds too good to be true,” said FBI Special Agent in Charge John Strong.    

“Fraudsters prey upon those in vulnerable positions, and this is a critical time for our nation’s small businesses,” said SBA OIG Special Agent in Charge Kevin Kupperbusch.  “SBA OIG and its law enforcement partners are actively working together to root out fraud in SBA’s programs and bring those responsible to justice.  The public is encouraged to learn about potential fraud schemes and scams as a safeguard to being victimized.”

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act), is the largest financial assistance bill to date, and includes provisions to help small businesses.  The public is warned to be extra vigilant in protecting their information and to be on the lookout for grant fraud, loan fraud, and phishing, as scammers are targeting small business owners during these economically difficult times. 

To raise awareness, the SBA’s Office of Inspector General has published the following information pertaining to possible scams and emerging fraud schemes: 

The SBA does not initiate contact on either 7a or disaster loans or grants.  If you are proactively contacted by someone claiming to be from the SBA, suspect fraud. 
If you are contacted by someone promising to get approval of an SBA loan, but requires any payment up front or offers a high interest bridge loan in the interim, suspect fraud.
The SBA limits the fees a broker can charge a borrower to 3% for loans $50,000 or less and 2% for loans $50,000 to $1,000,000 with an additional ¼% on amounts over $1,000,000.  Any attempt to charge more than these fees is inappropriate.
Look out for phishing attacks/scams utilizing the SBA logo.  These may be attempts to obtain your personally identifiable information (PII), to obtain personal banking access, or to install ransomware/malware on your computer.
If you are in the process of applying for an SBA loan and receive email correspondence asking for PII, ensure that the referenced application number is consistent with the actual application number.
Any email communication from SBA will come from accounts ending with sba.gov.
The presence of an SBA logo on a webpage does not guarantee the information is accurate or endorsed by SBA.  Please cross-reference any information you receive with information available at www.sba.gov.
If you have a question about getting an SBA disaster loan, call 800-659-2955 or send an email to disastercustomerservice@sba.gov.  If you have questions about other SBA lending products, call SBA’s Answer Desk at 800-827-5722 or send an email to answerdesk@sba.gov. The above-referenced list of emerging SBA scams and additional information can also be accessed at: https://www.sba.gov/document/report--sba-programs-scams-fraud-alerts.

If you think you are a victim of a scam or attempted fraud involving SBA loans and COVID-19, contact the SBA OIG hotline at (800) 767-0385, or online at: https://sbax.sba.gov/oigcss/.

You can also report the fraud by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form.