“The faster the better,” the workers were told at the height of the coronavirus pandemic, as the financial technology company Blueacorn raced to review small businesses that sought federal loans. Blueacorn employees and contractors allegedly began to overlook possible signs of fraud. The company weighed whether to prioritize “monster loans that will get everyone paid,” as the firm’s co-founder said. Investigators found that Blueacorn collected about $1 billion in processing fees — while its operators may have secured fraudulent loans of their own, the Washington Post reports. The allegations against Blueacorn and other firms are laid out in a roughly 120-page report released Thursday by the House Select Committee on the Coronavirus Crisis, a congressional watchdog tasked to oversee $5 trillion in federal pandemic aid.
The 18-month probe — spanning more than 83,000 pages of documents — contends there was rampant abuse among a set of companies known as fintechs, which jeopardized federal efforts to rescue the economy and siphoned off public funds for possible private gain. Some of the companies involved had never before managed federal aid. At the height of the pandemic, they failed to hire the right staff to thwart fraud. They amassed major profits from fees generated from the loans — large and small, genuine and problematic — that they processed and reviewed. And they repeatedly escaped scrutiny from the Small Business Administration, putting billions of dollars at risk, the probe found.
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