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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
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