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Bloomberg explores how it seemed like everyone made a bogus application to the Small Business Administration’s Covid-19 Economic Injury Disaster Loan program. Professional thieves from Russia to Nigeria cashed in. Low-level employees at the agency watched helplessly as misspent money flew out the door.
The SBA’s much-vaunted new computer system, built by an outside contractor for $750 million, proved blind to certain types of fraud and sometimes awarded grants even when it spotted disqualifying features. The agency pressured loan officers with little training to churn through applications quickly, while making it difficult for them to detect or report suspicious ones. When officials eventually tightened fraud controls, the result was often delays and rejections for legitimate applicants.
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