U.S. Attorneys and FBI Warn of Potential Fraud Surrounding SBA Loans

CHARLESTON, W.Va. – The United States Attorney’s Offices of the Northern and Southern Districts of West Virginia, the Federal Bureau of Investigation, and the U.S. Small Business Administration are asking small business owners to be aware of possible scams relating to the CARES Act.

U.S. Attorney Bill Powell in the Northern District of West Virginia, U.S Attorney Mike Stuart in the Southern District of West Virginia , Eugene Kowel, Acting Special Agent in Charge of the FBI Pittsburgh  Office, SBA OIG Eastern Region Special Agent-in-Charge Kevin Kupperbusch and Karen Friel, SBA West Virginia District Director, have joined resources in an effort to prevent small businesses already struggling from the restrictions in place because of the COVID-19 pandemic from being victimized a second time by criminals using the 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.

“West Virginia businesses are struggling to survive a once-in-a-lifetime pandemic. The last thing we need are criminals scamming the essential aid meant to help businesses survive,” said U.S. Attorney Mike Stuart, Southern District of West Virginia. “Fraudsters and scammers never miss an opportunity to fraud and scam even in desperate times. Small businesses are the backbone of our state’s economy. We have their back.  We will do all we can to protect them.”

"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."

“Fraudsters prey upon those in vulnerable positions, and this is a critical time for our nation’s small businesses,” said SBA OIG’s Eastern Region 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.”

When the CARES Act was signed into law, the doors were opened for small businesses to access $349 billion in federal aid at a most crucial time for entrepreneurs that are balancing the health and safety of their families and themselves while operating their small business.  And while small businesses take note of the U.S. Small Business Administration’s Economic Injury Disaster Loan (EIDL) and the Paycheck Protection Program (PPP), so do those with bad intentions.

“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.”

Entrepreneurs should remember that if anyone asks you for money, they are not legitimate, nor are emails that end in anything but “.gov”.

The SBA does not reach out to initiate a loan, nor does the SBA ask for information previously 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.

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.