‘Beefy King’ and other bogus firms secured $ 7million in PPP loans from lender: report

  • Fake businesses raised $ 7 million in COVID-19 small business aid through online lender Kabbage, ProPublica find.
  • Most of the bogus businesses were registered as farms, with names like “Deely Nuts” and “Beefy King”.
  • Kabbage processed 378 loans to fraudulent companies through the Paycheck Protection Program, ProPublica reported.
  • See more stories on the Insider business page.

Fake businesses received $ 7 million in federal COVID-19 relief loans through the online lending platform Kabbage last year, and most were registered as farms, according to an investigation by ProPublica.

Kabbage processed 378 bogus business loans under the Paycheck Protection Program (PPP) as part of the program’s first funding round from March through August last year, according to the survey. Non-existent farms claiming to be based in New Jersey, such as “Ritter Wheat Club” and “Deely Nuts,” each received $ 20,833, the maximum loan available to individual businesses, ProPublica reported.

the Coronavirus Aid, Relief and Economic Security Act (CARES), adopted in March 2020, funded the PPP program and aimed to help struggling businesses keep their employees on their payrolls and stay afloat during the pandemic.

The investigation also revealed that “Beefy King”, a fake cattle operation registered in New Jersey, had requested a Loan of $ 20,567. The money was registered at the address of Joe Mancini, mayor of Long Beach Township, who denied knowing about the request.

“There is no agriculture here: we are a sandbar, for god’s sake,” Mancini told ProPublica over the phone.

ProPublica checked the New Jersey business records for the farms and found that none of them existed. Hundreds of PPP applicants in 28 states failed to show up on state registration records, and other lenders also had non-existent businesses on their books, not just Kabbage, ProPublica reported.

The story is part of a larger issue: the Small Business Administration, which connects business owners with lenders, valued in January, that it approved loans for 55,000 potentially ineligible businesses and that 43,000 received more money than needed for their payroll.

ProPublica began investigating the loans after a New Jersey resident contacted, claiming his name was attached to a Kabbage loan linked to a “melon farm.”

The lender, who Acquisition of American Express in August last year, processed nearly 300,000 loans in the first round of PPP funding, according to ProPublica.

“At any point in the loan process, if fraudulent activity was suspected or confirmed, it was reported to FinCEN, the SBA Inspector General’s office and other federal investigators, with Kabbage providing full cooperation,” Kabbage spokesman Paul Bernardini told ProPublica. a declaration by e-mail.

Kabbage did not immediately respond to Insider’s request for comment.


Source link

About Renee Williams

Check Also

Caymanian students now eligible for tuition loans in UK

Caymanian students starting their studies in the UK in the 2022/2023 academic year will now …

Leave a Reply

Your email address will not be published. Required fields are marked *