RICHMOND, Va. (WHSV) — As banks have worked nonstop in recent days to process new loans for small businesses through the Small Business Administration's Paycheck Protection Program (PPP), others are trying to exploit the opportunities available to scam small business owners.
The United States Attorney’s Offices of the Northern and Southern Districts of West Virginia, the SBA, and the FBI are alerting small businesses to scams that are circulating relating to the CARES Act and PPP assistance.
They say they want to stop small businesses already struggling from closures due to COVID-19 from being victimized a second time by criminals using the SBA program as an opportunity to commit fraud.
“Those who prey on others look for opportunities like the various loans provided to small businesses. United States Attorneys and our respective law enforcement partners, like the FBI, are on the lookout for those predators. We strongly encourage those who become aware of such scams to report it to the authorities so we can take action” said U.S. Attorney Bill Powell, Northern District of West Virginia.
"Fraudsters will take advantage of any opportunity to steal money," said FBI Pittsburgh Acting Special Agent in Charge Eugene Kowel. "We recognize that criminals could try to prey on small businesses during this time of fear and anxiety. The FBI works closely with the private sector so companies can make informed decisions in response to malware attacks. Companies can prevent and mitigate malware infection by utilizing appropriate back-up and malware detection systems. They can also train employees to be skeptical of emails, attachments and websites they don’t recognize. If you discover your business is the victim of a fraudulent incident, file a complaint with the FBI’s Internet Crime Complaint Center at ic3.gov."
When the CARES Act was signed into law, the doors were opened for small businesses to access $349 billion in federal aid at a critical time for business owners trying to balance the health safety of their families while running a business.
The federal government approved an additional $310 billion in loans through the SBA after the program was quickly depleted, but many small businesses have struggled to get funding due to a bottleneck at the SBA that's slowed down the process.
In this round, banks have reported that they were being allowed to submit only 350 applications an hour, if that many. Meanwhile, they have thousands on hand.
As small businesses work to get funding through the program, though, ready to take drastic measures in some cases, those with bad intentions have taken note of the situation.
“Unfortunately, small businesses are being targeted at a time they are most vulnerable,” noted SBA West Virginia District Director Karen Friel. “Look out for phishing attacks and scams utilizing the SBA logo. These may be attempts to obtain your personally identifiable information (PII), to acquire personal banking access, or to install ransomware or malware on your computer.”
If anyone asks you for money to be able to process an SBA loan for you, they are not legitimate. Nor are any emails about SBA loans coming from sites not ending with ".gov."
Also, the SBA does not reach out to anyone to initiate a loan. Nor do they ask anyone for information that was already provided in the application process,
If you have any doubt, reach out to your nearest SBA office to ask. As you are working harder than ever to preserve your business and its employees amid the coronavirus pandemic, do not allow bad actors to hinder your efforts.
SBA’s Office of Inspector General has published a list of possible scams and fraud schemes to raise public awareness: https://www.sba.gov/document/report--sba-programs-scams-fraud-alerts.
You can report fraud, waste, abuse, mismanagement, or misconduct involving SBA programs to the SBA OIG hotline at (800) 767-0385, or online at: https://sbax.sba.gov/oigcss/.
To report any suspicious activity regarding the COVID-19 virus, residents are asked to call the National Center for Disaster Fraud Hotline at 1-866-720-5721or go to Justice.gov/DisasterComplaintForm.