In September, Suzanne Sanders received a notice in the mail. She said she was due to start repaying a $ 9,100 coronavirus relief loan to the federal Small Business Administration (SBA) by August 2021.
The advisory went on to say that the loan was used to support his small business: Suzanne Sanders Farm. But Sanders doesn’t own a farm. She didn’t see it either. She lives in a two-story suburban house in Lenexa, and has never taken out a pandemic relief loan.
She reported the notice to the SBA, but every month since September, Sanders says she has continued to receive refund notices.
“I’ve just had enough,” Sanders said. “And I don’t even know what else to do, because you only have a little time in the day to try to solve problems like this.” It’s troubling to think that people can just get a loan without signing or anything. ”
Hundreds of thousands of dollars in fraudulent loans
As of March 2020, the SBA made billions of dollars in pandemic relief available through COVID-19 Economic Disaster Loans, or EIDL.
The loans were made to small businesses, including farms, so that owners could pay basic operating expenses, such as inventory or office supplies. It was such a loan that the entity named Suzanne Sanders Farm had requested.
To speed up the distribution of relief supplies, the SBA has relaxed internal controls, according to the SBA Inspector General’s own office. The office reported in October that this translates into “billions of dollars in potentially fraudulent loans and lending to potentially ineligible businesses.”
This fraud affected dozens of Johnson County residents.
An analysis by the Shawnee Mission Post found that the addresses and, in most cases, the names of at least 35 Johnson County residents have been used to apply for loans from seemingly non-existent or bogus farming businesses. In total, the fraud in these cases exceeded $ 940,000.
This is only about 0.3% of the total of $ 295 million in approved EIDL payments for Johnson County entities. But for people like Sanders, who fear being held accountable for a loan she never took out, it’s a big headache.
Consequences in the real world
In December, the SBA was ordered by the court to disclose the names, addresses and loan amounts of all loans made under EIDL, as well as the larger and more well-known Paycheck Protection Program, or PPP, which aimed to help small businesses keep their employees on their payroll.
To find cases of fraud, the Shawnee Mission Post reduced this database to EIDL loans applied for in Johnson County. Then the Post restricted that list to those with “firm” in the candidate’s name. If the business doesn’t appear in a Google search or the Kansas Secretary of State Database of business entities, the post office contacted the owner of the property.
Loan amounts fraudulently taken using the addresses of these Johnson County residents range from $ 3,600 to $ 123,500.
The addresses accompanying the entity’s application were, in most cases, typical residential houses like that of Suzanne Sanders, but were listed as vegetable farms, tomato farms, poultry farms and apple farms. earthen.
“As much as I love potatoes and would love to make vodka, that’s not me,” said Paige Darby from Olathe.
The database lists a loan of $ 9,800 to Paige Darby Potatoe Farms. (With “potato” misspelled.)
Police are investigating some cases – but finding fraudsters is difficult
Local law enforcement agencies say they have only heard of a few cases related to such allegations of pandemic fraud.
The Shawnee Police Department was contacted by at least one resident who called after being informed by mail that their address was in the federal database. The Olathe Police Department says it received two reports last month, one for a loan of $ 68,600 and another for $ 75,600.
The Lenexa, Overland Park and Shawnee Police Departments all told the Post that they had not received any reports or heard any complaints about this type of scam.
It’s unclear who used the personal information of Sanders, Darby, and dozens of others to obtain these federal loans, and getting answers can be difficult.
“These cases are difficult to investigate and often the suspects in these cases are in different countries, and that’s it – now it’s electronic, so a lot of it is trying to heal the victim and try to restore their identity, ”he said. said Joel Yeldell of the Olathe Police Department.
People whose names and addresses appear in the federal EIDL database are likely victims of fraud and identity theft, said Michael Rapp, a consumer defense attorney in Kansas City, Kan.
“Why would you be on this list if it isn’t you?” Rapp said, adding: “If they got a loan in (your) name, using (your) information to get that loan, then you should be really worried that it ends up having an impact on your credit, of one way or another. “
He added that “by implication it is very possible that their Social Security number is affected – whether or not it has been used.” Notably, the EIDL loan request request a social security number or employer identification number.
A representative for the SBA said identity theft victims will not be held responsible for loans taken out on their behalf.
“But it’s a process, because it needs to be investigated,” said June Teasley, regional communications director for SBA Region 7, which includes Kansas.
Residents struggle to get answers
Eight different Johnson County residents told the Post that, like Sanders, they received a letter from the SBA indicating that a loan was taken out using their address, name, or both.
With the exception of several who noticed an SBA investigation into their credit, the majority of those the Post spoke with were unaware that their addresses and names were in the SBA database.
“If $ 85,000 was released, I was never notified,” said Katie Stevens of Leawood
According to the database, a loan of $ 85,800 was approved for his speech – to a company called Niemann Flavored Agriculture Farming.
Several people the station spoke to expressed frustration with what they perceived to be a lack of communication on the part of the ASB.
After reporting the fraud, these people said that they still did not know if the loan debt in their name and linked to their address had in fact been released, nor did they know how much information they had. been used to apply for the loan.
Many continued to receive monthly letters reminding them to repay the loan. Under this program, payments are postponed for a year.
After receiving her first mail, Suzanne Sanders called the SBA and the SBA Inspector General’s office. He was told to complete a report form at identitytheft.gov, which is managed by the Federal Trade Commission, and freezes its credit.
“But I haven’t been able to contact anyone since,” said Sanders, who works in the mortgage industry. “When I call I stay on hold for at least an hour and have a job so I can’t.”
James Kilian, from Olathe, received an invoice for a loan made to an entity called Kilian Bury Farm about four months ago.
After contacting the SBA Inspector General’s office for the first time, he was told his case was on a list. But Kilian still doesn’t know where or to whom the funds were disbursed, or by which bank they disbursed – although he’s now called three times.
He said he had not received written confirmation that he would not be required to repay the loan.
“They didn’t give us any information,” Kilian said. “I am considering seeing a lawyer just to get information.”
What to do if you think you have been a victim of fraud
People who suspect they have been the victim of a fraudulent EIDL loan are encouraged to report it to the SBA. Office of the Inspector General Hotline at 1-800-767-0385 or by email at [email protected].
You must also file a local police report and freeze your credit.
The Post confirmed that the SBA Disaster Assistance Office should follow up with people who report that their information was used to obtain a pandemic relief loan through EIDL. In some cases, the inspector general of the SBA office may follow up and contact those who have reported identity theft.
No Johnson County resident the Post spoke to said they had been contacted by the SBA Disaster Assistance Office or the OIG. The Post confirmed that monthly postal statements are sent automatically by the SBA and do not reflect the work of the SBA and OIG to report loans as identity theft.
The SBA says it will share additional advice in the coming weeks on how the agency plans to discharge loan debt fraudulently incurred on behalf of individuals.
If individuals do not receive a direct communication from the SBA in the next few weeks, they should email [email protected] for instructions on how to release loan debt due to theft. ‘identity.