
Photographer: Mark Kauslerich / Bloomberg
JPMorgan Chase & Co. found that some of its employees applied improperly and received Kovid-Relief money, which according to a person knowledgeable on the case, to legitimate US businesses affected by the epidemic.
The bank discovered actions that were all linked to the economic injury disaster loan program, after noting that the suspicious funds were deposited in checking accounts owned by bank employees, saying the person was not identified Because information is private. The findings prompted an unusual all-staff message from JP Morgan on Tuesday that surprised many across the industry for its apparent admission of potentially illegal acts while not describing what they had done.
The Small Business Administration’s disaster lending program was greatly expanded as the shutdown was shut down across the country due to the epidemic, which led many small enterprises to need a cash lifeline. Unlike the paycheck protection program, banks did not issue or reduce disaster loans and grants. Instead, loans or grants came directly from the SBA.
The findings of employee misconduct came in a broad sweep of personal accounts that received business support, the person said. SBA Warned banks on 22 July to search for suspicious deposits or activity as part of the EIDL program.
The agency’s inspector has since marked evidence of fraud in the program, stating that it identified more than $ 250 million in aid given to potentially ineligible recipients, as well as possibly $ 45.6 in fake payments. Million assisted. A Bloomberg Businessweek analysis of SBA data last month identified $ 1.3 billion in suspicious payments.
Read more: Phantom companies receive more than $ 1 billion in aid
A JP Morgan spokesman declined to comment.
The country’s largest bank sent memos to about 256,000 employees on Tuesday, in which senior leaders said they were investigating whether any employees Helped people to misuse aid programs, including “paycheck security program loans, unemployment benefits and other government programs”. The firm stated that it identified conduct by customers that did not meet its principles and “may also be illegal” and some employees were also reduced to ethical standards.
To highlight the widespread misuse of relief programs, the firm’s leaders decided to send memos, the person said, and the message told employees to report any unethical activity they had witnessed.
While the bank has identified a large-scale misuse of the EIDL program, only a small percentage of it is tied to bank employees, the person said. The bank has not found evidence of wrongdoing by employees related to the PPP program, the person said.
Small Business Administration has been Scrambling To prevent misuse of a loan program designed to reduce occupational disaster, According to a watchdog report on Wednesday. The evaluation was based on internal emails received by the group, including one Noted “Widespread presence of fake applications.”
Give a tip on how the Virus Relief Fund is used or misused? Write to us at [email protected], or follow the instructions to submit an anonymous tip https://www.bloomberg.com/tips/
– with assistance by Zachary Mider
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