Davids Calls on SBA to Investigate Fraudulent Small Business Loans

February 19, 2021
Press Release

Representative Sharice Davids has called on the Small Business Administration (SBA) to investigate claims of fraudulent small business loans, including those happening in Johnson County.

Numerous cases of identity fraud have been reported in the Emergency Injury Disaster Loan (EIDL) program, which was expanded by Congress to provide relief to small businesses during the pandemic. An SBA investigation found that approximately $1.1 billion in fraudulent loans have been distributed to potentially ineligible entities, including criminals using stolen identities for fraudulent businesses and applications. 

“The EIDL program has proven to be some of the most immediate and critical assistance that many small businesses received during the COVID-19 pandemic, but we need to make sure it’s getting to those who need it and not being exploited by bad actors” said Davids. “Every dollar wasted by fraud is a dollar that could have gone to a struggling business. We must find the balance between rapid distribution of funds and preventing waste, fraud, and abuse. That’s why I’m calling on the SBA to investigate these cases of fraud and ensure that the victims of identity theft in the EIDL program are held blameless.”

The Shawnee Mission Post reported that at least 35 Johnson County residents have been the victim of fraudulent EIDL loans using identity theft, the total claims of which exceeded $940,000.

“Not only does this abuse undermine this vital program and the small businesses who do deserve and need those funds, but Kansans who are victims of identity theft are also left to prove their innocence before these fraudulent loans in their name come due,” said Davids. “This is the last thing they should have to worry about during what is already such a difficult time for our community. I’m committed to rooting out fraud and waste in this program and in all COVID-19 relief programs, so that aid actually go to those in need.”

Residents of Kansas’ Third District who have been impacted by these fraudulent claims are encouraged to call Davids’ District Office at (913) 621-0832 for assistance. Caseworkers are helping several district residents with this issue, and are available to help constituents navigate reporting cases of fraud and answer questions.

To view Davids’ letter to the SBA, click here.