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U.S. NEWS Friday 2 december 2022
House panel says lax screening helped facilitate PPP fraud
By FATIMA HUSSEIN grams in future crises — are
Associated Press administered more effec-
WASHINGTON (AP) — Fi- tively, efficiently, and equi-
nancial technology firms tably while keeping waste,
abdicated their responsi- fraud, and abuse to an ab-
bility to screen out fraud solute minimum," said Rep.
in applications for a fed- Jim Clyburn, D-S.C., who
eral program designed to chairs the coronavirus crisis
help small businesses stay subcommittee.
open and keep workers Clyburn said the commit-
employed during the pan- tee's findings were sent to
demic, a report by a House the Justice Department
investigations panel said and the Small Business Ad-
Thursday. ministration.
The House Select Subcom- In March, the Government
mittee on the Coronavirus Accountability Office re-
Crisis launched its investi- ported that while agen-
gation of the firms in May cies were able to distrib-
2021 after public reports ute COVID-19 relief funds
that the firms were linked to quickly, "the tradeoff was
disproportionate numbers House Majority Whip James Clyburn, D-S.C., leaves the chamber at the Capitol in Washington, that they did not have sys-
of fraudulent loans issued Nov. 17, 2022. tems in place to prevent
under the Paycheck Pro- Associated Press and identify payment er-
tection Program. viewed one in every three fraud prevention practices loan applications, issue PPP rors and fraud" due in part
Former President Donald funded PPP loans in 2021 were so lax that lenders loans, or otherwise serve as to "financial management
Trump rolled out the Pay- — were connected to sig- describe its systems as "put a lender in the PPP. Wom- weaknesses."
check Protection Program nificant percentages of together with duct tape ply helped connect bor- Billions have been fraudu-
to help small businesses PPP loan applications with and gum." It said Womply's rowers with PPP lenders, lently claimed through
stay open and keep their indicators of fraud. software became a pre- which were responsible for various pandemic relief
workers employed. Presi- It said the firms used ques- ferred product for crimi- reviewing, approving, sub- programs — including Pay-
dent Joe Biden maintained tionable screening proce- nal enterprises seeking to mitting, funding, and ser- check Protection Program
the program and directed dures and business prac- defraud the government vicing the PPP applications loans, unemployment insur-
money to more low-income tices in reviewing the loans, of PPP loans. The firm also and loans," the company's ance and others that were
and minority-owned com- leading to "the needless received over $5 million in lawyers wrote. rolled out in the midst of the
panies. All told, $800 billion loss of taxpayer dollars," PPP loans for itself, which Womply referred 128,813 worldwide pandemic that
was spent on the program. the report said. The firms the Small Business Adminis- PPP applicants to lenders shut down global econo-
The financial technology "took billions in fees from tration later determined it in 2020, and 2,584,420 ap- mies for months.
firms reviewed PPP appli- taxpayers while becoming was ineligible to receive. plicants to lenders in 2021. The U.S. Secret Service in
cations for lenders, which easy targets for those who Womply said in a state- "We must learn from this August said it has recov-
would ultimately distribute sought to defraud the PPP." ment sent to the commit- inexcusable misconduct ered $286 million in fraudu-
PPP money to businesses. Neither firm responded im- tee in January that the to erect guardrails that lently obtained pandemic
The report said two start- mediately to a request for firm's role in the screening will help ensure that fed- loans and returned the
ups, Blueacorn PPP and comment. process was limited. "Wom- eral programs — including money to the Small Business
Womply Inc. — which re- The report said Womply's ply did not approve PPP emergency assistance pro- Administration.q
New U.S. sanctions against North
Koreans over missile program
WASHINGTON (AP) — The to a record pace this year of ICBMs with a potential
Biden administration on with more than 60 launch- range to reach the U.S.
Thursday imposed sanc- es, dialing up pressure on mainland and an interme-
tions on three members of Washington and Seoul. diate-range missile flown
North Korea's ruling party's The three officials "played over Japan.
central committee for their major roles" in North Korea's North Korea has also con-
involvement in the country's development of weapons ducted a barrage of
ballistic missile program. in violation of U.N. resolu- short-range launches it de-
The Treasury Department tions, the Treasury Depart- scribed as simulated nucle-
announced it was target- ment said in a statement, ar attacks on South Korean
ing the director and vice di- and "have personally at- and U.S. targets as it angrily
rector of the Workers Party tended numerous ballistic reacted to the expansion This photo provided on Nov. 19, 2022, by the North Korean
of Korea, Jon Il Ho and Yu missile launches since at of the allies' combined mili- government shows what it says is a Hwasong-17 intercontinental
Jin, respectively, along with least 2017." tary exercises, which North ballistic missile before its test firing at Pyongyang International
another central committee The trio were penalized by Korea insists are rehearsals Airport in Pyongyang, North Korea, Friday, Nov. 18, 2022.
member, Kim Su Gil, with the European Union in April for a potential invasion. Associated Press
asset freezes and bans on and had been previously North Korea has punctuat-
Americans conducting any covered under existing ed the tests with threats of The North's rubber-stamp of scenarios, including
type of business with them. U.S. sanctions against the nuclear conflict with Wash- parliament in September non-war situations, where
The sanctions came as North's ruling party. ington and Seoul that com- passed a law that autho- the country may perceive
North Korea has ramped The dozens of tests have municated an escalatory rized preemptive nuclear its leadership as under
up its ballistic missile testing included multiple launches nuclear doctrine. attacks in a broad range threat.q