SBA OIG Semiannual Report to Congress (Oct. 2024–March 2025)
Archived source: SBA OIG Semiannual Report to Congress (Oct. 2024–March 2025). Captured from www.oversight.gov.
Cited in: Sheldon Shoemaker
Full text
Semiannual Report to Congress
October 1, 2024 – March 31, 2025
U.S. Small Business Administration | Office of Inspector General
Message from the Deputy Inspector General
April 30, 2025
I am pleased to present the U.S. Small Business Administration (SBA) Office of Inspector
General’s (OIG) Spring 2025 Semiannual Report to Congress. This report summarizes OIG’s
activities from October 1, 2024 through March 31, 2025.
Since 2020, our office has provided taxpayers with more than a 68-fold return on investment,
which includes dollar accomplishments exceeding $14 billion for SBA’s Coronavirus 2019
(COVID-19) pandemic assistance programs. Since March 2020, OIG investigations have resulted
in 1,632 indictments, 1,213 arrests, and 1,045 convictions. Additionally, OIG’s Audits Division has
produced 52 reports and 142 recommendations with $18.5 billion in questioned costs.
Our collaboration with SBA, the U.S. Secret Service, and other federal agencies and financial
institutions has led to the return of nearly $30 billion in COVID-19 Economic Injury Disaster Loans
(EIDL) and Paycheck Protection Program (PPP) funds from seizures, financial institutions, and
borrowers. OIG has played a critical role in these recoveries through partnerships, education
efforts, and fraud deterrence initiatives.
We’ve seen success in audit oversight as well. Consistent with our oversight recommendations in
our management advisory Ending Active Collections on Delinquent COVID-19 Economic Injury
Disaster Loans (Report 23-16) and inspection report SBA’s Guaranty Purchases for Paycheck
Protection Program Loans (Report 24-20), the agency has conducted comprehensive cost-benefit
analyses that justify pursuing collections of $30 billion in EIDLs and PPP loans under $100,000.
In June 2023, we estimated SBA’s missing or weakened internal controls resulted in the
disbursement of over $200 billion in potentially fraudulent PPP loans and COVID-19 EIDLs to
those who exploited internal control vulnerabilities. SBA OIG is positioned to be the most
effective and efficient force against the pandemic assistance fraudsters who stole funds from
eligible small business owners and exploited the public trust.
Our office requires adequate funding to investigate these complex criminal networks before the
10-year statute of limitations on PPP and EIDL fraud expires. We have recovered billions so far
with our law enforcement partners, demonstrating our capability to root out fraud, waste, and
abuse and promote integrity and efficiency in SBA’s programs and operations.
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U.S. Small Business Administration | Office of Inspector General
Our Work this Period
During this reporting period, OIG continued to bring
fraudsters to justice and provide an exponential
return on investment to American taxpayers. During
the 6-month period from October 2024 through
March 2025, OIG issued 10 reports with 71
recommendations to improve SBA operations and
reduce fraud and unnecessary losses in agency
programs. We questioned $1.4 billion in costs from
our oversight reviews. In addition, OIG
investigations resulted in 90 indictments, 117
convictions, and $302 million in dollar
accomplishments — bringing our total monetary accomplishments to about $1.7 billion.
Significant reviews and investigation findings this semiannual period:
• Our investigators uncovered a national criminal scheme — unprecedented in its scope —
involving over $198 million in PPP Loans funded through a financial technology company
and two other lenders that capitalized on taxpayer funds intended to help struggling
small business owners during an economic crisis. The Oregon couple who founded the
fintech was indicted for allegedly using fabricated documents to inflate loan amounts and
then charge borrowers illegal kickbacks based on a percentage of funds received. This
case is the tip of the iceberg of a vast network that has so far seen multiple indictments
of customers and co-conspirators, including two Arizona brothers who pled guilty in a
$109 million kickback scheme.
• An Arkansas man was sentenced to 196 months imprisonment and 3 years of supervised
release for fraudulently obtaining over $3.3 million in EIDL and PPP funding. He was
ordered to pay $16.3 million in restitution and forfeit $4.3 million as part of a pandemic
assistance kickback scheme.
• In a groundbreaking collaboration with the U.S. Department of Labor OIG, we identified
about $2.3 billion in potentially fraudulent EIDLs disbursed, including 1,124 loans SBA had
already flagged with hold codes, totaling nearly $178 million; 6,164 that were identified
as part of SBA OIG’s fraud landscape white paper, totaling nearly $690 million; and
10,971 newly identified potentially fraudulent EIDLs totaling nearly $1.4 billion. We made
three recommendations to SBA to improve data sharing, detect and mitigate fraud, and
recover funds from ineligible recipients (Report 25-06).
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U.S. Small Business Administration | Office of Inspector General
OIG is committed to oversight excellence and partnering across government to promote
integrity, efficiency, and effectiveness within SBA’s programs and operations for the benefit of
the American people and small businesses.
Sheldon Shoemaker
Deputy Inspector General
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U.S. Small Business Administration | Office of Inspector General
Contents
SBA’s Top Management and Performance Challenges ........................................................................................................................ 1
Summary of OIG Oversight Work .......................................................................................................................................................... 2
Small Business Access to Capital ........................................................................................................................................................... 2
Inspections and Evaluations............................................................................................................................................................. 3
Notable Investigations ..................................................................................................................................................................... 5
Disaster Assistance Program .................................................................................................................................................................. 9
Evaluation and Inspection ................................................................................................................................................................ 9
Notable Investigations ................................................................................................................................................................... 10
Contracting and Counseling Programs ................................................................................................................................................ 12
Investigations .................................................................................................................................................................................. 13
Agency Management ........................................................................................................................................................................... 15
Audit, Report, and White Paper .................................................................................................................................................... 15
Other Significant OIG Activities............................................................................................................................................................ 17
Background Investigations ............................................................................................................................................................. 17
Present Responsibility and Other Administrative Enforcement Actions ..................................................................................... 17
Stakeholder Presentations on Fraud Awareness .......................................................................................................................... 17
Reviews of Proposed Agency Regulations, Operating Procedures, and Other Initiatives .......................................................... 18
Administrative False Claims Act Cases .......................................................................................................................................... 18
OIG Hotline ........................................................................................................................................................................................... 19
Serving Taxpayers ........................................................................................................................................................................... 19
Organizational Overview ...................................................................................................................................................................... 20
U.S. Small Business Administration ............................................................................................................................................... 20
Office of Inspector General ............................................................................................................................................................ 21
Appendices ........................................................................................................................................................................................... 24
Appendix A: Reporting Period Statistical Highlights ..................................................................................................................... 24
Appendix B: Reports Issued ........................................................................................................................................................... 26
Appendix C: Reports, Recommendations, and Management Decisions ..................................................................................... 28
Appendix D: Investigations Reporting Statistics ........................................................................................................................... 43
Appendix E: Legal Actions Summary ............................................................................................................................................. 45
Appendix F: Cosponsored and Other Activities ............................................................................................................................ 57
Appendix G: External Peer Reviews ............................................................................................................................................... 60
Appendix H: Office of Inspector General Reporting Requirements............................................................................................. 61
Make a Difference ................................................................................................................................................................................ 63
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U.S. Small Business Administration | Office of Inspector General
NOTICE:
Pursuant to the James M. Inhofe National Defense Authorization Act for Fiscal Year 2023, Public
Law 117-263, Section 5274, any nongovernmental organizations and business entities identified
in this report have the opportunity to submit a written response for the purpose of clarifying or
providing additional context as it relates to any specific reference contained herein. Comments
must be submitted to AIGA@sba.gov within 30 days of the final report issuance date. We
request that any comments be no longer than two pages, Section 508 compliant, and free from
any proprietary or otherwise sensitive information. The comments may be appended to this
report and posted on our public website.
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U.S. Small Business Administration | Office of Inspector General
SBA’s Top Management Fiscal Year 2025 Challenges
and Performance Challenge 1
Protecting the Integrity of SBA Programs
Challenges Issues:
Managing Fraud Risk
The U.S. Small Business Administration’s (SBA) Improving Verification of Eligibility
Mitigating Improper Payments
Office of Inspector General (OIG) is required to
Seizure and Return of Funds
annually report on the most serious management
Challenge 2
challenges facing the agency in accordance with Managing SBA’s Loan Portfolio and Participating Lenders
the Reports Consolidation Act of 2000 and Office Issues:
of Management and Budget Circular A-136. Servicing Disaster Loans
Overseeing Lenders
The management challenges report is an
Challenge 3
important tool to help the agency prioritize its Measuring Performance and Monitoring SBA Programs
work to improve program performance and Issues:
enhance operations. OIG remains committed to Measuring Program Performance
Monitoring Program Performance Results
protecting the interests of American taxpayers by Ensuring Funds Are Used for Intended Purposes
promoting positive change within SBA and across
Challenge 4
government, ensuring taxpayer dollars are spent Managing Data
efficiently according to intent. Issues:
Storing, Monitoring, and Analyzing Program Data
Identification of an issue as a top challenge does Sharing Authorized Data Between Government
not necessarily denote significant deficiencies or Agencies
Evaluating and Improving Data Reliability
lack of attention on SBA’s part. Many of the
challenges are longstanding and inherently Challenge 5
Managing Risks in Information Technology Systems and
difficult. Addressing the challenges will require
Cybersecurity
consistent attention from agency management
Issues:
and ongoing engagement with Congress, the Improving Information Technology Systems
public, and other stakeholders. You can find the Management
Preparing for Artificial Intelligence Challenges
Top Management and Performance Challenges
Deploying and Monitoring New Third-Party Systems
Facing the Small Business Administration in Fiscal Complying with Federal Information Security
Year 2025 in the Reports section of the SBA OIG Modernization Act Management Requirements
website.
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Summary of OIG Oversight Work
Small Business Access to Capital
SBA provides small businesses with capital and financial assistance through several key programs.
The agency has a financial assistance portfolio of guaranteed loans totaling about $156 billion, as
of September 2024.
The Section 7(a) loan program is SBA’s principal vehicle for providing small businesses with access
to credit that cannot be obtained elsewhere. Recipients may use proceeds from a 7(a) loan to
establish a new business or assist in acquiring, operating, or expanding an existing business. This
program relies on numerous outside parties (such as borrowers, loan agents, and lenders) to
complete loan transactions.
SBA has made significant policy changes to its traditional 7(a) loan program with the goal of
helping expand access to capital, including increasing non-bank lender participation. These lenders
are considered by SBA to be higher risk than those lenders with federal regulators and require
more oversight by SBA. OIG has also conducted prior audit work related to third-party service
providers in the 7(a) program. For this reporting period, we assessed the risk associated with non-
bank lenders in the Paycheck Protection Program (PPP) and SBA’s use of hold codes for potentially
fraudulent PPP loans reported by lenders. Congress created the PPP, appropriating $792 billion
total, in response to the Coronavirus Disease 2019 (COVID-19) pandemic’s widespread economic
effects on the U.S. economy.
Criminals use a wide array of techniques to fraudulently get — or induce others to obtain — SBA-
guaranteed loans. The techniques include submitting fraudulent documents, making fictitious
asset claims, manipulating listed property values, using loan proceeds contrary to the terms of the
loans, and failing to disclose debts or previous criminal records. Consequently, because of these
criminal activities, there is a greater chance of financial loss to the agency and its lenders. OIG
dedicates a significant portion of its resources to identifying wrongdoers and, whenever possible,
recovering taxpayer funds.
The following summarizes our audit and investigative work this period.
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U.S. Small Business Administration | Office of Inspector General
Inspections and Evaluations
SBA’s 504 Loan Liquidation Process (Report 25-02)
We conducted a verification inspection of SBA’s corrective actions for the two
recommendations from our Report 16-23, SBA’s 504 Loan Liquidation Process.
SBA’s 504 Certified Development Company loan program provides small
businesses with long-term, fixed-rate financing to purchase land, buildings, machinery, and other
fixed assets. The loans are funded through a variety of sources, including private sector lenders,
proceeds from selling SBA-guaranteed debentures, and borrower equity investments. A third-party
lender must provide at least 50 percent of the project’s financing, the certified development
company provides up to 40 percent through a 100 percent SBA-guaranteed debenture, and the
applicant provides at least 10 percent. SBA is responsible for liquidating the assets in the event of a
default on the loan. Specifically, SBA’s Fresno and Little Rock commercial loan service centers are
responsible for managing 504 loan liquidation operations.
We determined SBA implemented our recommendations by establishing a training plan and
holding training courses on 504 loan liquidations for both commercial loan service centers, and
that SBA continued to conduct reviews of commercial loan service centers internal guidance,
systems, and practices to ensure that 504 loans are liquidated consistently nationwide.
Access this verification inspection on the SBA OIG Reports site.
SBA's Oversight of Non-Bank Lenders and Third-
Party Service Providers Associated With PPP Loans
(Report 25-04)
We assessed SBA’s oversight of non-bank lenders, including financial technology, and third-party
service providers in the PPP. Over 5,300 lenders, including bank and non-bank lenders,
participated in the PPP. The primary distinction between the two is that non-bank lenders are not
federally regulated. Both were allowed to partner with third-party service providers to assist in the
PPP loan process. We examined PPP loans processed between April 2020 and May 2021 that had
submitted forgiveness applications.
We found SBA could enhance its oversight of non-bank lenders, including fintechs, and service
providers to promote program integrity and reduce financial loss. Executive and legislative actions
led SBA to reduce or eliminate barriers for PPP borrowers, resulting in a significant increase in
loans made by non-bank lenders. Hold harmless provisions protected lenders from consequences
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if the lender complied with applicable legal requirements. Reduced controls and limited oversight
increased the risk of fraud.
We found that non-bank PPP lenders made $14.2 billion in suspected fraudulent loans at a rate
more than five times higher than loans made by traditional bank lenders, nearly 43 percent of
which was made by lenders categorized as fintechs and other State Regulated Finance Companies.
Loans involving service providers had a suspected fraud rate more than three times higher than
loans made without a service provider.
We made six recommendations for SBA to strengthen oversight of non-bank lenders and service
providers. Management agreed with five of our six recommendations and partially agreed with
one.
Access this evaluation report on the SBA OIG Reports site.
SBA’s Use of Hold Codes for Potentially Fraudulent
PPP Loans Referred by Lenders (Report 25-07)
We reviewed SBA’s use of hold codes for potentially fraudulent PPP loans
referred by lenders. We found opportunities exist for SBA to enhance its handling of lender-
referred PPP loans suspected of fraud or illegal activity and its process for capturing these loans to
ensure they are promptly flagged to mitigate fraud risk and financial loss. SBA’s Office of Credit
Risk Management established a project for lenders to refer PPP loans suspected of fraud or illegal
activity; however, we found that SBA did not flag all suspicious loans referred by lenders with a
hold code or capture all the loans in its summary workbook. This delayed response for flagging the
loans was inconsistent with SBA’s established procedures and how other program offices handled
lender referrals. Flagging a suspicious loan triggers a targeted review during both forgiveness and
post-forgiveness examinations, providing an opportunity to mitigate improper payment due to
fraud.
We made five recommendations to enhance program integrity and mitigate fraud risk and
financial loss by ensuring only eligible applicants receive program funding and that opportunities
are identified to recover fraudulent or ill-gotten funds. SBA management partially agreed with four
recommendations and agreed with one recommendation.
Access this management advisory on the SBA OIG Reports site.
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U.S. Small Business Administration | Office of Inspector General
SBA’s Awarding of Small Business Lending
Company Licenses (Report 25-08)
We assessed SBA’s process for awarding Small Business Lending Company
licenses and the agency’s compliance with licensing procedures. A Small Business Lending
Company is a non-depository lending institution that is licensed and authorized by SBA to make
loans pursuant to Section 7(a) of the Small Business Act and to intermediaries in SBA's Microloan
program. Since 1981, SBA has had only 14 licensed Small Business Lending Companies. In 2023,
SBA licensed three new lenders focused on underserved markets, including small businesses in
native, rural, and low-income communities.
We found SBA complied with its licensing procedures, which included an evaluation of qualitative
factors required in the application and a comprehensive assessment of factors that gauged each
applicant’s strengths and limitations, such as historical performance measures and the applicant’s
affiliation with lenders or lender service providers previously sanctioned by SBA. We reviewed
applications for the three awarded licenses and determined they contained all the information SBA
required. As a result, we made no recommendations.
Access this evaluation report on the SBA OIG Reports site.
Notable Investigations
For investigative cases involving the COVID-19 Economic Injury Disaster Loan (EIDL), another
pandemic assistance program, see the Disaster Assistance section.
Co-Founders of Financial Technology Company
Charged in $200 Million COVID-19 Relief Fraud Scheme
An Oregon couple was indicted on four counts of wire fraud and one count of
conspiracy to commit wire fraud involving over $198 million in funded PPP Loans.
The investigation revealed they co-founded a fintech in April 2020, purportedly to assist applicants
in obtaining PPP loans. To obtain larger loans for certain PPP applicants, they and other co-
conspirators allegedly fabricated documents, including payroll records, tax documentation, and
bank statements. They allegedly charged borrowers illegal kickbacks based on a percentage of the
funds received.
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As part of the alleged scheme, they and their co-conspirators expanded the fintech's operations
through agreements with two lenders. Under these agreements, their fintech collected and
reviewed PPP applications from potential borrowers on behalf of the lenders and worked with
them to submit applications to SBA in exchange for a percentage of the fees paid to lenders for
approved PPP loans. To obtain a greater volume of kickbacks from borrowers and percentage of
lender fees from SBA, they submitted PPP loan applications they knew contained materially false
information. This case is part of a vast network of pandemic assistance fraud that includes multiple
indictments of customers, recruiters, and cooperating co-conspirators. Trial was set for late April
2025. Read more about this case on the U.S. Department of Justice (DOJ) press release site.
Arizona Brothers Pled Guilty in $109 Million
Pandemic-Relief Conspiracy
Two Arizona brothers pled guilty for conspiring to defraud the government of
nearly $109 million in loans intended to help small businesses during the
COVID-19 pandemic.
From January 2021 until March 2022, one brother used false and fraudulent business information
from customers to submit at least 350 fraudulent PPP loan applications through an affiliated
fintech to a lender participating in the PPP. He and his co-conspirators created fictious documents
to support the fraudulent loan applications. He submitted at least 1,300 PPP applications seeking
$178 million from the lender, $105 million of which was funded, garnering him $3 million in
kickbacks from customers.
His brother continued a related scheme through March 2022, conspiring to submit customers’
fraudulent business information to submit 140 PPP loan applications through the fintech to the
lender, $3.9 million of which were funded, garnering over $957,000 in kickbacks. Read more about
this case on the DOJ press release site.
Illinois Man Charged with Defrauding COVID-19 Relief
Programs of $13 Million
An Illinois man was charged with one count of wire fraud for conspiring with others
to submit fraudulent applications and supporting documents to third-party lenders and SBA. He
received three PPP loans totaling over $1.2 million for alleged businesses he operated. He also
allegedly recruited more than 60 clients to secure $13 million in fraudulent PPP funds.
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U.S. Small Business Administration | Office of Inspector General
Nursing Facility Company Agrees to Pay $18 Million to
Settle False Claims Act Allegations Relating to PPP
Loans
The owner and affiliates of a large chain of California-based skilled nursing facilities
agreed to pay $18 million to resolve allegations that they violated the False Claims Act by
knowingly providing false information in support of PPP loan applications and loan forgiveness
applications.
The settlement resolves allegations that the company and its affiliates falsely certified they were a
small business with fewer than 500 employees when they submitted their PPP loans and loan
forgiveness applications in 2020. These applications failed to disclose that the entities were part of
a larger chain owned and controlled by the same people, which made all the businesses ineligible
for PPP loans. Read more about this case on the DOJ press release site.
Former Law Enforcement Officer and Co-Conspirators
Sentenced for COVID-19 Fraud
A Columbus man, a former law enforcement officer, and three co-conspirators were
sentenced to 130 months imprisonment total, 15 years of supervised release, and ordered to pay
over $20 million for submitting fictitious documents and claiming nonexistent business revenue in
their PPP loan applications. They collected over $2.3 million in commission fees, which they used
to purchase a 2018 Mercedes-Benz C-Class and a 2020 Mercedes-Benz G 63.
Two Florida Men Convicted in Multi-Defendant PPP
Scheme
Two Florida men were convicted of conspiracy to commit wire fraud, conspiracy to
commit money laundering, and money laundering in an intricate PPP scheme. They submitted over
60 fraudulent PPP loan applications with forged documents, falsified the number of employees,
and received over $14.5 million. They face up to 20 years in prison for conspiracy and fraud and 10
years for money laundering.
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Pennsylvania Man Convicted of Defrauding Pandemic
Relief Programs of $8.4 Million
A Pennsylvania man was convicted on 12 counts of wire fraud, 3 counts of
aggravated identity theft, and 7 counts of money laundering for defrauding federal COVID-19
assistance programs of $8.4 million. From March 2020 to June 2021, he applied for 19 PPP loans
and EIDLs using stolen identities and bogus support documents. He also falsely renewed the
Pennsylvania photo ID card of a deceased family friend and then used it to apply for a PPP loan. He
used over $8.4 million in loan proceeds to purchase waterfront property in Florida, a Range Rover,
and pay his children’s private school fees. He also engaged in risky stock trading that resulted in
the loss of millions.
Texas Man Pled Guilty in $5 Million COVID-19 Fraud
Conspiracy
A Texas man pled guilty to conspiracy to commit wire fraud in connection with a
multi-jurisdictional PPP and tax scheme that defrauded the government of over $5 million. The
criminal network involved more than a hundred co-conspirators across eight states. They deployed
sophisticated strategies of social media recruitment, document editing software, identity theft,
and use of various payment processors and financial institutions to launder the money. While the
man was in custody with the Federal Bureau of Prisons, he communicated with principal co-
conspirators via email and social media to produce fabricated bank statements and IRS
documents.
Former Baltimore Government Employee Sentenced to
4 Years for Bribery and CARES Act Fraud
A Maryland man was sentenced to 48 months imprisonment and 3 years supervised
release for bribery and conspiracy to commit wire fraud involving Coronavirus Aid, Relief, and
Economic Security (CARES) Act relief benefits. As an employee of the Baltimore City Department of
Finance Revenue Collections department, the man routinely accepted bribes from various
property owners in Baltimore whose properties was subject to certain financial obligations, and if
the obligations remained unpaid, to a tax sale. The man also submitted a fraudulent PPP loan
application containing a fabricated IRS form.
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U.S. Small Business Administration | Office of Inspector General
Disaster Assistance Program
SBA’s direct disaster assistance loans have been the primary form of federal assistance for
repairing and rebuilding nonfarm, private sector losses following declared disasters since the
agency’s inception in 1953. SBA provides long-term financial assistance to businesses of all sizes,
nonprofits, homeowners, and renters following a declared disaster — the only form of SBA
assistance not limited to small businesses. Since low-interest disaster assistance loans are
government aid, creditworthiness and the ability to repay are taken into consideration before a
loan is awarded.
The program includes four categories of loans for disaster-related losses: home disaster loans,
business disaster loans, economic injury disaster loans, and military reservist economic injury
disaster loans. As a result of the pandemic’s widespread economic effects on the U.S. economy,
Congress increased disaster program funding, approving over $405 billion in COVID-19 EIDLs.
We have ongoing work on SBA’s response to hurricanes Helene and Milton and the agency’s
capability to properly forecast and request disaster assistance lending authority to avoid a lapse in
appropriated funds.
Evaluation and Inspection
Approved Disaster Assistance Loans Matching
COVID-19 EIDLS and PPP Loans with Fraud Hold
Codes (Report 25-03)
We evaluated whether SBA approved disaster loan applications for individuals or businesses that
also had a COVID-19 EIDL or PPP loan that had been flagged with a fraud hold code. SBA provided
about $1.2 trillion in direct and guaranteed loans to businesses affected by the pandemic through
the COVID-19 EIDL program and PPP. In our white paper COVID-19 Pandemic EIDL and PPP Loan
Fraud Landscape (Report 23-09), we identified potential fraud totaling over $200 billion in both
programs. Of that, SBA flagged $51 billion in loans with fraud hold codes.
In 2023, the agency started using a system with fraud detection software to review each disaster
assistance loan application and check it against existing pandemic assistance loans with fraud hold
codes. Using these new internal controls, the agency declined 5,625 potentially fraudulent disaster
assistance loan applications. We found the agency still approved 188 loans totaling $8.1 million
even though they were flagged. Agency officials took action to prevent one of these loans from
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being disbursed after we brought it to their attention. We recommended SBA review and verify
the 187 other loans for legitimacy and eligibility. The agency agreed with our recommendation.
Access this evaluation report on the SBA OIG Reports site.
COVID-19: Data Sharing Project Finds Billions Paid
to Same Likely Fraudsters Under Both the
Unemployment Insurance and Economic Injury
Disaster Loan Programs (Report 25-06)
The U.S. Department of Labor Office of Inspector General and SBA OIG found that data sharing and
matching between Labor’s Employment and Training Administration and SBA could mitigate the
risk of fraudulent unemployment insurance benefit payments and SBA disaster program
disbursements. We identified more than $1.3 billion in potentially fraudulent unemployment
insurance and EIDL payments were made to the same likely fraudsters. We also identified over
$2.3 billion in potentially fraudulent EIDLs disbursed, including 10,971 newly identified potentially
fraudulent EIDLs totaling nearly $1.4 billion not previously identified by SBA OIG or SBA. If data
sharing and matching had existed during the pandemic, the agencies could have conducted a
higher level of review by matching applicants across both programs to mitigate fraudulent
payments. We made three recommendations — two for SBA to share data and facilitate improved
fraud controls via collaboration and one to reevaluate eligibility for potentially fraudulent EIDLs.
SBA management agreed with the three recommendations.
Access this inspection report on the SBA OIG Reports site.
Notable Investigations
For investigative cases involving the PPP, another pandemic assistance program, see the
Small Business Access to Capital section.
Head of Consulting Firm Agrees to Pay Over
$3.2 Million to Resolve Alleged False Claims
A Pennsylvania man agreed to pay over $3.2 million to resolve allegations that he
violated the False Claims Act by misusing funds meant to help his consulting firm weather the
adverse economic effects of the pandemic. Rather than use the funds according to law, the man
transferred most of his $1.9 million EIDL to a personal investment account.
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U.S. Small Business Administration | Office of Inspector General
Arkansas Man Sentenced to Over 16 Years for
$16 Million COVID-19 Relief Scheme
An Arkansas man was sentenced to 196 months imprisonment, 3 years of
supervised release, and ordered to pay $16.3 million in restitution in connection to a scheme to
obtain millions in COVID-19 funds by directing, assisting, facilitating, and submitting false and
fraudulent loan applications. From June 2020 through May 2022, he submitted numerous false
EIDL and PPP applications for his own businesses, misrepresenting their statuses, revenue, and
payroll. He also submitted dozens of EIDL applications using false and fraudulent information on
behalf of co-conspirators.
California Businessman Pled Guilty in Multi-Million
Dollar Fraud Scheme
A California man was sentenced to 18 months imprisonment, 36 months
supervised release, and ordered to pay restitution for his part in a $3 million multi-
level EIDL fraud scheme involving networks of entities and recruiters conspiring to falsify and
submit EIDL applications and supporting documentation.
An Oregon Couple Sentenced for Defrauding COVID-19
Relief Program
An Oregon couple were each sentenced to 36 months of probation, 60 days home
detention, 600 hours community service, and ordered to pay $493,000 in restitution for
submitting fraudulent EIDL and PPP applications for nonexistent businesses using falsified payroll
and revenue. They then used taxpayer funds for personal expenditures.
Alaska Business Owner Charged With Wire Fraud
An Alaska man was sentenced to 13 months imprisonment, 36 months of
supervised release, and order to pay/forfeit $122,500 for making false statements
about his criminal history in several EIDL applications. He is a lifetime registered sex offender,
convicted in November 2002 for several felonies, including burglary in a dwelling, carrying
concealed weapon, and sexual abuse of a minor.
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Contracting and Counseling Programs
The U.S. government is the largest single purchaser of goods and services in the world, awarding
over $760 billion in prime contracts annually. SBA works to maximize opportunities for small
businesses to receive these contract awards. As mandated by the Small Business Act, the
government-wide goal is to award at least 23 percent of contract dollars to small businesses.
SBA has specific programs that focus on strengthening types of small businesses, like those owned
by service-disabled veterans and women, as well as small businesses that are disadvantaged or
located in historically underutilized business zones (HUBZones).
The HUBZone program is intended to help small businesses stimulate their economically
challenged local economies. Similarly, to help small, disadvantaged businesses gain access to
federal and private procurement markets, SBA’s 8(a) Business Development Program helps socially
and economically disadvantaged entrepreneurs who own small businesses gain business skills and
access to federal contracting opportunities so they can better compete in the open marketplace.
The program offers free business development education, training workshops, and matchmaking
opportunities with federal buyers.
SBA also aids existing and prospective small businesses through a variety of counseling and training
services offered by partner organizations. Among these partners are Small Business Development
Centers, the SCORE mentoring network, Women’s Business Centers, and Veterans Business
Outreach Centers. SBA designed the Boots to Business program to provide transitioning military
service members with entrepreneurial skills and technical assistance to start their own businesses.
These programs all require effective and efficient management, outreach, and service delivery.
During this semiannual period, our audit work in this program area focused on reviewing select
Small Business Development Centers’ compliance with the terms and conditions of their
cooperative agreements. We expect to publish these reports in Fiscal Year 2025. We also expect to
issue a report on SBA’s oversight of Shuttered Venue Operators Grant (SVOG) recipients in fiscal
year 2025.
Spring 2025 Semiannual Report to Congress | 12
U.S. Small Business Administration | Office of Inspector General
Investigations
Construction Company Owner Pled Guilty to
Fraudulently Obtaining Federal Contracts
A Wisconsin woman who was the owner of a Milwaukee HUBZone certified
construction company pled guilty to one count of false statements. Prior to forming her own
construction company, she was employed with another construction company ineligible for
HUBZone contracts. In October 2020, she falsely certified that her construction company met
HUBZone eligibility requirements and complied with HUBZone rules and procedures. She also
falsely certified that she had no affiliate business. During the scheme, she solicited 15 HUBZone
set-aside contracts on behalf of her company and was awarded 7 HUBZone set-aside contracts
worth $4.7 million. She did not comply with the HUBZone subcontracting rules requiring her
construction company to perform at least 15 percent of the cost of HUBZone contract
performance. She did not disclose to SBA that employees of the other construction company
exercised control over the management and decision-making process of her business. That
business also relinquished control over key aspects of HUBZone contracts to the other business.
Her company also relied on the other construction company for HUBZone contract management.
Defense Contractor Indicted for Bribing Government
Employee in $100 Million Government Contracting
Scheme
A California man, who was a former technology company executive, was indicted for bribing a
government employee to win more than $100 million in government contracts. He gave a former
Naval Information Warfare Center Pacific employee expensive meals, golf outings, and provided
jobs to his friend and a family member. In return, the government employee took official action to
benefit the tech company, such as steering non-competitive small business contracts to it and
family companies. The government employee allowed the executive and other employees to draft
competitive procurement documents for various contracting jobs. He also allowed the executive
and others to ghost write emails, official government correspondence, and performance
evaluations, all to benefit the company and related businesses.
The government employee also agreed in an email to create a $50 million “competitive” contract
and award it to the tech company. He then allowed business employees to draft the contract
requirements and the price the government was expected to pay. To conceal their activities, they
13 | Spring 2025 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
failed to disclose organizational conflicts of interest in relation to their contracting efforts. They
also hid that the tech company was affiliated to other family companies, including two Native
Hawaiian 8(a) Business Development Program companies that were subcontracting millions in
work set aside for a disadvantaged 8(a) business to this company. The government employee has
pled guilty to multiple bribery schemes. He was scheduled to be sentenced in May 2025. Read
more about this case on the DOJ press release site.
Spring 2025 Semiannual Report to Congress | 14
U.S. Small Business Administration | Office of Inspector General
Agency Management
OIG is responsible for ensuring SBA goals are met and that managers appropriately safeguard the
agency from fraud, waste, and abuse. As part of this work, OIG coordinates with the offices of the
Chief Financial Officer, the Chief Information Officer, and the Chief Operating Officer to
independently review financial reporting and performance management, human resources,
procurements and grants, space and facilities, and maintenance of SBA’s information systems and
related security controls.
The following summarizes our audit work this period.
Audit, Report, and White Paper
Independent Auditors’ Report on SBA’s Fiscal Year
2024 Financial Statements (Report 25-05)
We contracted with independent certified public accounting firm KPMG LLP
to conduct an audit of SBA’s consolidated balance sheets as of September 30, 2024 and 2023 and
the notes related to these statements. KPMG reported significant matters for which it was unable
to obtain sufficient and appropriate audit evidence to provide a basis for an audit opinion on SBA’s
balance sheet as of September 30, 2024. KPMG issued a disclaimer of opinion on the consolidated
balance sheets as of September 30, 2024 and 2023.
SBA was unable to provide adequate evidential matter supporting a significant number of
transactions and account balances related to the PPP, EIDL program, the Restaurant Revitalization
Fund, and the SVOG program. As a result, KPMG was unable to determine whether any
adjustments to the following might have been necessary: credit program receivables and related
foreclosed property, other than intragovernmental accounts receivable, downward re-estimate
payable to Treasury, and loan guarantee liabilities and the related notes. KPMG identified seven
material weaknesses and two significant deficiencies in internal controls over financial reporting.
SBA’s Chief Financial Officer concurred with its findings and recommendations and agreed to
implement the recommendations.
Access this audit report on the SBA OIG Reports site.
15 | Spring 2025 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
Office of Inspector General Open
Recommendations as of December 31, 2024
(Report 25-09)
This report lists the recommendations from our prior reports that remained open as of December
31, 2024. The status of each recommendation is subject to change as we independently review
SBA’s ongoing implementation. Although SBA may have taken steps to implement a
recommendation listed in this report, such as by partially remedying the associated questioned
costs, a recommendation is not considered closed until it has been fully implemented. As of
December 31, 2024, there were 166 open OIG recommendations.
Access this report on the SBA OIG Reports site.
COVID-19 Pandemic EIDL and PPP Loan Fraud
Landscape Recommendations Update
(Report 25-10)
This report updates Congress on progress made by SBA on the 39 open pandemic-related
recommendations referenced in OIG Report 23-09, COVID-19 Pandemic EIDL and PPP Loan Fraud
Landscape. Over the course of the pandemic, SBA disbursed approximately $1.2 trillion in COVID-
19 EIDL and PPP funds. The economic assistance was intended to help eligible small business
owners and entrepreneurs adversely affected by the crisis. In OIG’s white paper, we estimated SBA
disbursed over $200 billion in potentially fraudulent loans through COVID-19 relief programs. To
establish this estimate, OIG used investigative casework, prior OIG reporting, and advanced data
analytics to identify multiple schemes used by fraudsters to steal from the American taxpayer and
exploit programs meant to help those in need.
Since the pandemic was declared a national emergency in March 2020 through the issuance of
OIG’s fraud landscape white paper in June 2023, OIG issued 77 pandemic-related
recommendations to SBA. Of the 77 recommendations, the agency had taken corrective actions to
close 38 of them. Thirty-nine recommendations remained open as of June 2023. SBA has been
working on implementing the corrective actions necessary to close the open recommendations. As
of December 31, 2024, SBA has closed 24 of the 39 pandemic-related recommendations that
remained open as of June 2023.
Access this white paper on the SBA OIG Reports site.
Spring 2025 Semiannual Report to Congress | 16
U.S. Small Business Administration | Office of Inspector General
Other Significant OIG Activities
Background Investigations
During this reporting period, OIG initiated 50 background investigations, issued 4 security
clearances for OIG employees and contractors, and adjudicated 4 background investigative
reports.
Present Responsibility and Other Administrative
Enforcement Actions
OIG promotes program integrity by making present responsibility referrals to SBA and other
agencies. Present responsibility means the business ethics, integrity, honesty, and competence of
persons who participate in SBA programs or otherwise do business with the government. During
this reporting period, OIG prepared nine present responsibility referrals.
Present responsibility referrals can result in suspensions, debarments, and similar administrative
enforcement actions. These actions protect taxpayer funds from program participants who are not
a good risk for the government.
A typical OIG referral contains a summary of allegations and criminal, civil, administrative, or other
evidence supporting the recommendation. Most OIG administrative referrals involve SBA’s loan
and contract programs. OIG ensures that a suspension and debarment official reviews all
appropriate allegations arising in other contexts, such as the investigation of False Claims Act
cases.
Stakeholder Presentations on Fraud Awareness
During this reporting period, SBA OIG held 102 presentations for internal and external
stakeholders to raise awareness of fraud, waste, and abuse related to SBA programs. More than
1,936 participants attended these events.
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U.S. Small Business Administration | Office of Inspector General
Reviews of Proposed Agency Regulations, Operating
Procedures, and Other Initiatives
OIG reviews changes SBA proposes to make to its program directives, such as regulations, internal
operating procedures, agency policy notices, and SBA forms completed by the public. OIG often
identifies material weaknesses in the proposals and makes recommendations to the agency for the
purpose of promoting economy and efficiency in the administration of, or preventing and
detecting fraud and abuse in, its programs and operations. During the reporting period, OIG
reviewed 66 proposed revisions of these program directives and submitted comments designed to
mitigate risk or improve 5 of these initiatives.
Administrative False Claims Act Cases
OIG does not have any administrative False Claims Act cases to report for this period. In addition,
there were no instances in which the reviewing official declined to proceed on a case reported by
an investigating official.
Spring 2025 Semiannual Report to Congress | 18
U.S. Small Business Administration | Office of Inspector General
OIG Hotline
Offices of inspector general have a hotline function that takes complaints from anyone who
suspects fraud, waste, abuse, or serious mismanagement within an agency or its programs by
employees, contractors, and the public. Hotline complaints may result in corrective actions, audits,
or administrative, civil, or criminal investigations.
Our OIG Hotline staff examines complaints and monitors the progress of matters referred to SBA
program offices for action to ensure the agency has promptly followed up, adequately resolved
allegations, and documented any corrective actions.
Serving Taxpayers
Hotline work has changed dramatically
because of the COVID-19 pandemic.
OIG’s Hotline team utilizes data
analytics to review and sort complaints
given the large influx associated with
SBA’s pandemic response programs.
The staff addresses each complaint
received via online submissions to the
SBA OIG website, email, and posted
mail, as well as referrals from banks
and other agencies.
During this semiannual period, the OIG
Hotline received more than 15,000 complaints of loan fraud and abuse, identity theft, contract
fraud, and problems with SBA’s customer service.
In total, since the pandemic began in March 2020, OIG has received more than 311,000
complaints, which averages more than 62,000 per year. By contrast, the OIG Hotline received 742
complaints in 2019.
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U.S. Small Business Administration | Office of Inspector General
Organizational Overview
U.S. Small Business Administration
SBA’s mission under the Small Business Act, as amended, is to maintain and strengthen the
nation’s economy by enabling the establishment and vitality of small businesses and assisting in
the economic recovery of communities after disasters.
SBA is organized around the areas of financial, contracting, entrepreneurial development, and
disaster assistance. The agency also represents small businesses through an independent advocate
and an ombudsman.
SBA headquarters is in Washington, D.C. The agency has staff in 10 regional offices, 68 district
offices and corresponding branch offices, and 2 disaster field operation centers. SBA also has 6
government contracting area offices and maintains a network of resource partners in all 50 states,
the District of Columbia, Puerto Rico, American Samoa, the U.S. Virgin Islands, and Guam.
Spring 2025 Semiannual Report to Congress | 20
U.S. Small Business Administration | Office of Inspector General
Office of Inspector General
OIG’s mission is to provide
independent, objective, and
timely oversight to improve the
integrity, accountability, and
performance of SBA and its
programs for the benefit of all
Americans.
Our strategic plan for fiscal
years 2022–2027 has four goals.
In addition to the Office of
Counsel to the Inspector
General, four divisions assist in
carrying out the statutory
responsibilities of OIG: the
Audits Division, Investigations
Division, Technology Solutions Division, and the Management and Operations Division.
Our vision is to be valued and engaged change agents who set the standard for oversight
excellence in support of America’s small businesses. We seek to demonstrate our values of
integrity, commitment, and excellence as we deliver products and services of the highest quality
defined by accuracy, timeliness, fairness, and usefulness.
The Office of Counsel provides legal and ethics advice to all OIG components; protects the OIG’s
interests in litigation arising out of or affecting OIG operations; assists in prosecuting criminal, civil,
and administrative enforcement matters; processes subpoenas; responds to Freedom of
Information Act and Privacy Act requests, and reviews and comments on proposed policies,
regulations, legislation, and procedures.
The Audits Division performs and oversees audits and reviews to promote the economical,
efficient, and effective administration of SBA programs and operations. Key areas of emphasis are
SBA loan programs, disaster assistance, business development, and government contracting
programs, as well as mandatory and other statutory audit requirements involving information
technology security, financial reporting, and other SBA program areas.
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U.S. Small Business Administration | Office of Inspector General
The Investigations Division manages initiatives to detect and deter illegal and improper activities
involving SBA’s programs, operations, and personnel. The criminal investigations staff carries out a
full range of traditional law enforcement functions.
Within the division, Hotline staff reviews allegations of waste, fraud, abuse, and severe
mismanagement within SBA or its programs made by employees, contractors, and the public. A
preliminary review of all complaints is conducted to determine the appropriate course of action.
As part of the review process, Hotline staff may coordinate reviews of allegations within OIG, SBA
program offices, or other government agencies.
The National Disaster Program identifies fraud trends and develops investigative leads associated
with the SBA pandemic assistance and disaster assistance loan programs working in coordination
with the OIG Investigations, Audits, and Technology Solutions divisions, SBA, Department of Justice
and external law enforcement agencies to detect and combat fraud and recover agency funds.
The Technology Solutions Division provides data analytics, cybersecurity and digital cloud
solutions, and IT user support to OIG. The division’s long-range strategies and goals are to root out
fraud, waste, and abuse in agency programs by developing innovative techniques in automation,
artificial intelligence, and machine learning for the benefit of American small businesses and
entrepreneurs.
The Management and Operations Division provides business support, such as budget and financial
management, human resources, and procurement, for various OIG functions and activities. The
Security Operations Staff within the division conduct required employee and contractor
background investigations to achieve a high level of integrity in the agency's workforce. It makes
adjudications on OIG employees and contractors for issuance of Personal Identity Verification
cards pursuant to Homeland Security Presidential Directive-12 background investigations
requirements.
OIG’s headquarters is in Washington, D.C. Our field offices are in Atlanta, Georgia; Boston,
Massachusetts; Charlotte, North Carolina; Chicago, Illinois; Columbus, Ohio; Dallas-Fort Worth,
Texas; Detroit, Michigan; Denver, Colorado; Seattle, Washington; Herndon, Virginia; Houston,
Texas; Los Angeles, California; Miami, Florida; New York, New York; Philadelphia, Pennsylvania;
Sacramento, California; San Francisco, California; Tampa, Florida; and Washington, D.C.
Spring 2025 Semiannual Report to Congress | 22
U.S. Small Business Administration | Office of Inspector General
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U.S. Small Business Administration | Office of Inspector General
Appendices
Appendix A: Reporting Period Statistical Highlights
Summary of OIG Dollar Accomplishments
Dollar Accomplishments as a Result of Investigations and Related Activities —
Potential Investigative Recoveries and Fines (criminal/civil) $145,326,559
Other Recoveries (e.g., repayment of funds, cost avoidance, voluntary return, $151,858,801
administrative seizures with partner law enforcement agencies)
Asset Forfeitures Attributed to OIG Investigations $4,933,494
Loans/Contracts Not Approved or Canceled as a Result of Investigations 0
Investigations Subtotal $302,118,854
Dollar Accomplishments as a Result of Audit Activities —
Disallowed Costs Agreed to by Management $1,382,855,478
Recommendations that Funds Be Put to Better Use Agreed to by Management 0
Audit Subtotal $1,382,855,478
Total OIG Dollar Accomplishments $1,684,974,332
Efficiency and Effectiveness Activities Related to Audit, Other
Reports, and Follow-up Activities
Reports Issued 10
Recommendations Issued 71
Dollar Value of Costs Questioned $1,382,855,478
Dollar Value of Recommendations that Funds Be Put to Better Use 0
Recommendations with Management Decisions 71
Recommendations without a Management Decision 0
Collections as a Result of Questioned Costs 0
Indictments, Convictions, and Case Actions
Indictments from OIG Cases 90
Convictions from OIG Cases 117
Cases Opened 99
Cases Closed 97
Spring 2025 Semiannual Report to Congress | 24
U.S. Small Business Administration | Office of Inspector General
SBA Personnel Actions Taken as a Result of Investigation
Dismissals 0
Resignations and Retirements 0
Suspensions 0
Reprimands 0
Program Actions Taken During the Reporting Period as a Result
of OIG Action
Present Responsibility Referrals to the Agency 9
Pending at the Agency as of March 31, 2025 9
Suspensions Issued by the Agency 3
Proposed Debarments Issued by the Agency 1
Final Debarments Issued by the Agency 1
Proposed Debarments Declined by the Agency 0
Administrative Agreements Entered by the Agency in Lieu of Debarment 0
Present Responsibility Actions by Other Agencies 0
Agency Legislative and Regulatory Proposals Reviewed
Legislation, Regulations, Standard Operating Procedures, and Other Issuances Reviewed 66
Comments Provided by OIG to Improve Legislation, Regulations, Standard Operating Procedures, and 5
Other Issuances
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U.S. Small Business Administration | Office of Inspector General
Appendix B: Reports Issued
Top Management Challenges
Title Report Number Issue Date Questioned Costs Unsupported Funds for Better
Costs Use
Top Management 25-01 10/15/2024 — — —
and Performance
Challenges Facing
SBA in FY 2025
Program Subtotal 1 — — — —
Agency Management
Title Report Number Issue Date Questioned Costs Unsupported Funds for Better
Costs Use
Report on SBA’s FY 25-05 11/15/2024 — — —
2024 Financial
Statements
OIG Open 25-09 3/3/2025 — — —
Recommendations
as of December
31, 2024
COVID-19 25-10 3/31/2025 — — —
Pandemic EIDL
and PPP Loan
Fraud Landscape
Recommendations
Update
Program Subtotal 3 — — — —
Credit/Capital Programs
Title Report Number Issue Date Questioned Costs Unsupported Funds for Better
Costs Use
SBA's 504 Loan 25-02 10/17/2024 — — —
Liquidation
Process
SBA’s Oversight of 25-04 11/13/2024 — — —
Non-Bank Lenders
and Third-Party
Service Providers
Associated With
PPP Loans
Spring 2025 Semiannual Report to Congress | 26
U.S. Small Business Administration | Office of Inspector General
SBA’s Use of Hold 25-07 1/16/2025 — — —
Codes for
Potentially
Fraudulent PPP
Loans Referred by
Lenders
SBA’s Awarding of 25-08 2/13/2025 — — —
Small Business
Lending Company
Licenses
Program Subtotal 4 — — — —
Disaster Assistance
Title Report Number Issue Date Questioned Unsupported Funds for Better
Costs Costs Use
Approved Disaster 25-03 11/5/2024 — — —
Assistance Loans
Matching COVID-
19 EIDLs and PPP
Loans With Fraud
Hold Codes
COVID-19: Data 25-06 12/5/2024 $1,382,855,478 $1,382,855,478 —
Sharing Project
Finds Billions Paid
to Same Likely
Fraudsters Under
Both the
Unemployment
Insurance and
Economic Injury
Disaster Loan
Programs
Program Subtotal 2 — $1,382,855,478 $1,382,855,478 —
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Appendix C: Reports, Recommendations, and
Management Decisions
Reports With Questioned Costs
IG Act Reporting Requirement Reports Recommendations* Questioned Costs** Unsupported
Costs***
No management decision made by — — — —
September 30
Issued during this reporting period 1 1 $1,382,855,478 $1,382,855,478
Management decisions made during — — — —
this reporting period
(i) Disallowed costs 1 1 $1,382,855,478 $1,382,855,478
(ii) Costs not disallowed — — — —
No management decision made by — — — —
March 31
* Reports may have more than one recommendation.
** Questioned costs are costs found to be improper.
*** Unsupported costs may be proper but lack documentation. Unsupported costs are a subset of questioned costs.
Reports With Recommendations that Funds Be Put to Better Use
IG Act Reporting Requirement Reports Recommendations Recommended Funds for Better Use
No management decision made by — — —
September 30
Issued during this reporting period — — —
Subtotal — — —
Management decisions made — — —
during this reporting period
(i) Recommendations agreed to by — — —
SBA management
(ii) Recommendations not agreed — — —
to by SBA management
No management decision made by — — —
March 31
Reports From Prior Periods With Overdue Management
Decisions
There are no reports from prior periods with overdue management decisions.
Spring 2025 Semiannual Report to Congress | 28
U.S. Small Business Administration | Office of Inspector General
Reports from Prior Periods with Open Recommendations as of
March 31, 2025
Report Title Date Issued Number of Open Aggregate Potential
Number Recommendations Cost Savings
20-03 Audit of SBA's Oversight of High-Risk Lenders 11/12/2019 3 —
20-20 Audit of SBA’s Compliance with the Debt 9/30/2020 1 —
Collection Improvement Act, as Amended
21-08 SBA’s Use of Vendors Without a Contract 2/3/2021 2 $10,800,476
21-09 Duplicate Loans Made Under the Paycheck 3/15/2021 1 —
Protection Program
21-14 Audit of SBA’s Oversight of Women’s Business 5/4/2021 5 $785,961
Centers’ Compliance With Cooperative
Agreement Financial Requirements
22-01 SBA's Emergency EIDL Grants to Sole 10/7/2021 1 $4,500,000,000
Proprietors and Independent Contractors
22-07 SBA’s Oversight of the Grant Recipient’s 1/18/2022 2 —
Implementation of the CARES Act Resource
Partners Training Portal
22-11 FY 2021 FISMA Review 4/28/2022 1 —
22-19 COVID-19 and Disaster Assistance Information 9/27/2022 6 —
Systems Security Controls
22-21 Paycheck Protection Program Eligibility for 9/26/2022 1 $684,000,000
Nonprofit Organizations
23-03 FY 2022 FISMA Review 12/13/2022 3 —
23-10 SBA's Administrative Process To Address 7/5/2023 1 $278,570,834
Potentially Fraudulent RRF Awards
23-15 SBA’s Oversight of Restaurant Revitalization 9/29/2023 6 $3,528,709,751
Fund Recipients
24-02 SBA’s Internal Controls to Prevent Shuttered 10/25/2023 2 —
Venue Operators Grants to Ineligible Applicants
24-06 SBA's Eligibility and Forgiveness Review of PPP 2/22/2024 7 —
Loans Made to Borrowers with Treasury’s Do
Not Pay Data Matches
24-07 Fiscal Year 2023 Federal Information Security 3/7/2024 6 —
Modernization Act
24-09 SBA’s Restaurant Revitalization Fund Program 3/26/2024 5 $6,410,764,905
Award Practices
24-10 SBA’s IT Investment Governance Framework 3/29/2024 3 —
24-16 SBA’s Fiscal Year 2023 Compliance with the 5/15/2024 8 —
Payment Integrity Information Act of 2019
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Report Title Date Issued Number of Open Aggregate Potential
Number Recommendations Cost Savings
24-17 7(a) Loan Approval for Borrowers with 5/21/2024 1 —
Unresolved COVID-19 Pandemic Loan
Compliance Issues
24-18 Evaluation COVID-19 EIDL Applicants on the U.S. 6/4/2024 1 $145,265,191
Department of the Treasury's Do Not Pay List
24-20 SBA’s Guaranty Purchases for Paycheck 7/9/2024 7 —
Protection Program Loans
24-21 Improvements Needed in SBA’s Shuttered 7/10/2024 1 —
Venue Operators Grant Post-Award Review
Process
24-23 SBA’s Oversight of HUBZone Program 8/15/2024 3 —
Participants’ Continuing Eligibility
24-25 SBA’s Oversight of the Community Navigator 9/24/2024 3 —
Pilot Program Performance Navigator Pilot
Program Performance
— Total — 80 $15,558,897,118
Significant Recommendations from Prior Reporting Periods
Without Final Action as of March 31, 2025
Report Date Issued Number Recommendation Date of Final Action
Number Management Target Date
Decision
20-03 11/12/2019 1 Develop and implement policies and procedures to 11/15/2019 1/31/2025
document OCRM's justification for not conducting planned
reviews and identifying and prioritizing additional lenders
for review.
20-03 11/12/2019 2 Develop and implement a comprehensive database to 11/15/2019 3/31/2025
manage its oversight of high-risk lenders to ensure
performance of all planned reviews, implementation of
risk mitigation actions, and identification of noncompliant
lender and systemic material loan deficiencies.
20-03 11/12/2019 5 Develop and implement policies and procedures that 11/15/2019 01/31/2025
require OCRM to communicate systemic lender issues and
material loan deficiencies to the appropriate SBA loan
approval and purchase centers to facilitate proactive
portfolio management and to mitigate the risk of
improper guaranty purchases in the event of default.
20-20 9/30/2020 10 Perform a cost benefit analysis to determine if SBA should 04/29/2022 04/18/2025
begin assessing fees to offset the cost of processing and
handling delinquent disaster loans.
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U.S. Small Business Administration | Office of Inspector General
Report Date Issued Number Recommendation Date of Final Action
Number Management Target Date
Decision
21-08 2/3/2021 1 Require responsible personnel to execute a contract for 02/01/2021 09/06/2024
foreclosure and real estate services to ensure the
procurement of services are obtained and authorized in
accordance with the Federal Acquisition Regulation
requirements.
21-08 2/3/2021 3 Ratify the over $10.8 million in payments in accordance 02/02/2023 09/06/2024
with the FAR and 48 C.F.R. § 1.602-3.
21-09 3/15/2021 1 Review the OIG identified potential duplicate 03/31/2021 05/29/2025
disbursements for eligibility and take action to recover any
improper payments as applicable.
21-14 5/4/2021 2 Remedy $523,790 in unsupported matching funds, 05/04/2021 03/17/2025
unsupported program income, and the resulting portion of
the federal funds reimbursed for the unmet match, and
$186,537 in unsupported expenses.
21-14 5/4/2021 3 Recover $31,215 for improperly awarded contracts and 05/04/2021 03/17/2025
$31,424 in unallowable or unallocable expenses.
21-14 5/4/2021 4 Implement policies and procedures for conducting 05/04/2021 01/21/2025
thorough financial compliance reviews and coordinate
with the Office of Field Operations to train field office
personnel responsible for semiannual site visits.
21-14 5/4/2021 5 Establish policies holding program officials accountable for 05/04/2021 3/17/2025
promptly following up on financial examination results and
enforcing cooperative agreement requirements.
21-14 5/4/2021 7 Review expenses for the $28,089 reallocation of budget 05/04/2021 03/21/2025
expenses we detailed in this report to ensure these costs
are allowable and document the rationale for the
reallocation or recover costs that are unallowable.
22-01 10/7/2021 1 Review the applications of sole proprietors and 08/22/2022 04/30/2025
independent contractors that included numbers of
employees but no Employer Identification Number; and
Remedy the $3.5 billion disbursed to sole proprietors and
$1 billion disbursed to independent contractors that
exceeded the amount allowed by SBA’s policy.
22-11 4/28/2022 2 Ensure the continuity of operations plan is tested 04/29/2022 06/30/2025
annually, as required by Federal Continuity Directive 1.
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Report Date Issued Number Recommendation Date of Final Action
Number Management Target Date
Decision
22-19 9/27/2022 1 Ensure the existing SBA System Development 11/08/2022 03/31/2025
Methodology is updated to include supply chain risk-
management practices as required by OMB Circular A-130
and high-value asset system designation guidance. Also,
ensure high-value asset system risks are incorporated into
the enterprise risk management framework, as
recommended by OMB M-19-03 and SBA SOP 90 47 6.
22-19 9/27/2022 2 Communicate and enforce the SBA System Development 11/08/2022 7/31/2025
Methodology in which a traceability matrix is used to
ensure that system requirements can be tested and
demonstrated in the operational system. Ensure all
requirements are aligned with the contractual acceptance
criteria.
22-19 9/27/2022 5 In conjunction with the Enterprise Risk Management 11/08/2022 08/01/2025
Board, implement enterprise-wide privacy risk mitigation
practices that can be assimilated into new and existing
system program designs.
22-19 9/27/2022 7 Transition information systems and common controls to 11/10/2022 06/30/2025
an ongoing authorization process (when eligible for such a
process) with the formal approval of the respective
authorizing officials or reauthorize information systems
and common controls as needed, on a time or event-
driven basis in accordance with agency risk tolerance, as
required by OMB Circular No. A-130 and SOP 90 47 6.
22-19 9/27/2022 8 Review and update POA&Ms at least quarterly as required 11/09/2022 06/30/2025
by SOP 90 47 6.
22-19 9/27/2022 10 Implement an automated process to document and 11/09/2022 06/30/2025
monitor system changes as recommended by NIST SP 800-
53 Rev. 5.
22-21 9/26/2022 1 Review the 179 PPP loans, totaling approximately $684 06/03/2024 05/30/2025
million, for compliance with affiliation and size standards
to ensure eligibility requirements were met and seek
remedy or repayment for all loans deemed ineligible.
23-03 12/13/2022 2 Implement a process to ensure SBA reviews its external 12/16/2022 02/14/2025
service providers for supply chain risks and ensure all
assessments of supply chain risks are documented as
outlined in NIST 800-53.
23-03 12/13/2022 3 Communicate and reinforce to program offices the 12/16/2022 04/30/2025
requirement to review and remove system and user
accounts in accordance with SOP 90 47 6.
Spring 2025 Semiannual Report to Congress | 32
U.S. Small Business Administration | Office of Inspector General
Report Date Issued Number Recommendation Date of Final Action
Number Management Target Date
Decision
23-03 12/13/2022 5 Develop, document, and implement a process that 12/16/2022 04/30/2025
requires management review of information security data
and report information security threats.
23-10 7/5/2023 1 Prioritize and complete the review of the 2,172 awards 08/15/2023 12/27/2024
that were flagged by the point-of-sale partner as having
unsupported gross sales and take appropriate
administrative actions to recover improper payments,
which includes 110 awards that were suspected of fraud.
23-15 9/29/2023 1 Follow-up with recipients who did not submit their final 10/05/2023 10/07/2024
annual report as required by April 30, 2023, and take
action to recover funds.
23-15 9/29/2023 2 Review the 210 RRF award recipients currently marked in 10/05/2023 04/30/2025
the PPP loan data as potentially fraudulent or ineligible
that were not selected for post award review.
23-15 9/29/2023 3 Extend the record retention period and notify all RRF 05/06/2025 4/30/2025
award recipients in writing in accordance with 2 CFR
200.334.
23-15 9/29/2023 4 Assess the post-award review process and manpower 10/05/2023 10/07/2024
requirements to ensure post award reviews are conducted
in a prompt manner. Use the results of the assessment to
improve processing times to ensure reviews are
completed before the statute of limitations expire.
23-15 9/29/2023 5 Take immediate administrative actions to recover 10/05/2023 10/07/2024
improper payments from the 5 hotels and 18 recipients
found to be ineligible, for a total of 23 ineligible award
recipients identified totaling $39 million.
23-15 9/29/2023 6 Establish and implement procedures to recover unused 10/05/2023 10/07/2024
funds or recover funds paid to ineligible recipients and
prioritize this effort.
24-02 10/25/2023 1 Reevaluate eligibility for the 47 applicants we questioned 01/31/2024 05/22/2025
and recover grant funds from the ineligible applicants.
24-02 10/25/2023 2 Implement additional controls to ensure that, during the 07/16/2024 05/22/2025
monitoring, auditing, and compliance phases, awards are
carefully screened to verify eligibility and to recover grant
funds from ineligible entities.
24-06 2/22/2024 1 Review the 1,799 PPP loans totaling over $89 million, that 03/27/2024 01/31/2025
matched a DNP data source, to ensure eligibility
requirements were met and seek remedy or repayment of
all loans deemed ineligible.
33 | Spring 2025 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
Report Date Issued Number Recommendation Date of Final Action
Number Management Target Date
Decision
24-06 2/22/2024 2 Review the 49 PPP loans totaling approximately 09/30/2024 08/29/2025
$3.5 million and the 43 loans totaling approximately
$7.2 million to ensure borrowers met eligibility
requirements and seek remedy or repayment of loans
deemed ineligible.
24-06 2/22/2024 3 Conduct a review of PPP loans, in which the DNP hold 10/03/2024 09/30/2025
codes were cleared to 1) identify those cleared using pre-
decisional memos and 2) those cleared without sufficient
evidence to support the reviewer’s loan decision and seek
remedy or repayment of loans deemed ineligible.
24-06 2/22/2024 4 Develop and implement controls, such as supervisory 10/03/2024 09/30/2025
reviews, to ensure PPP loans and loans for future stimulus
programs with DNP matches receive manual reviews, as
required. The reviews should ensure that pre-decisional
memos are not used to clear DNP hold codes and that the
loan files contain relevant and appropriate documentary
evidence to support the loan review decisions.
24-06 2/22/2024 5 Develop and implement clear guidance requiring 10/03/2024 09/30/2025
responsible officials to maintain documentary evidence
used to support loan decisions in the loan files.
24-06 2/22/2024 6 Review the 59,893 PPP applications that matched a DNP 03/08/2024 01/31/2025
data source to ensure borrowers met eligibility
requirements and seek remedy or repayment of loans
deemed ineligible.
24-06 2/22/2024 7 Review the additional 47,940 PPP loans totaling over 03/27/2024 01/31/2025
$1.7 billion, identified through the DNP data match, to
ensure borrowers met the eligibility requirements and
seek remedy or repayment of loans deemed ineligible.
24-07 3/7/2024 5 Develop a strategy to ensure that products, system 03/27/2024 2/14/2025
components, systems, and services of external providers
are consistent with the organization’s cybersecurity and
supply chain requirements.
24-07 3/7/2024 6 Define timeframe and remediation requirements for 03/26/2024 12/31/2024
baseline and configuration weaknesses.
24-07 3/7/2024 7 Properly update and remediate vulnerabilities and 03/27/2024 04/30/2025
configuration weaknesses throughout the SBA
environment.
24-07 3/7/2024 9 Ensure implementation procedures for data loss 03/27/2024 12/31/2024
prevention are updated at least on a biannual basis to
reflect new processes and new requirements.
Spring 2025 Semiannual Report to Congress | 34
U.S. Small Business Administration | Office of Inspector General
Report Date Issued Number Recommendation Date of Final Action
Number Management Target Date
Decision
24-07 3/7/2024 10 Update existing procedures that identify the roles of 03/27/2024 04/30/2025
individuals with significant IT responsibilities who require
role-based training and ensure such training is provided
and tracked.
24-07 3/7/2024 11 Provide training to individuals with contingency planning 03/27/2024 04/30/2025
roles and responsibilities.
24-09 3/26/2024 11 Develop a plan for future similar programs to leverage 4/30/2024 03/31/2025
applicable existing SBA data sources when determining
eligibility and monitoring awards. The plan should include
requirements to evaluate effectiveness of the use of the
data as controls to reduce risk of improper payments.
24-09 3/26/2024 2 Validate historical sales for 47,565 awards designated or — —
treated as Tier 2 that failed or did not receive IRS
validation. Recover any excess funds paid that are
attributable to unverified historical sales data.
24-09 3/26/2024 3 Review the 3,443 applicants awarded funds totaling — —
$376,583,100 that self-certified as a brewery or inn, to
determine if they met the 33 percent onsite sales
eligibility requirement and recover any funds from
applicants that did not meet the requirement.
24-09 3/26/2024 4 In accordance with Public Law 117-2, § 5003(a)(4)(A)(i) 4/30/2024 05/30/2025
take immediate action to review and recover improper
payments from the 14 affiliated business groups disclosed
by RRF applicants for a total of $55,067,326 in excess
funds paid, beyond the $10 million limit per affiliated
group.
24-09 3/26/2024 5 Review the 16,345 applicants that disclosed having an — —
affiliated business to determine if the amounts collectively
awarded to the applicant and affiliates exceeded the
$10 million maximum and recover any excess awards.
24-10 3/29/2024 2 Ensure the architecture review board reviews new 06/14/2024 08/31/2025
investments to confirm compatibility with agency systems
and ensure the Business Technology Investment Council
approves new investments prior to purchase, as required
by SOPs 90 52 1 and 90 44.
24-10 3/29/2024 4 Update procedures to provide specific guidance to agency 02/20/2025 01/30/2025
investment managers on how to utilize earned value
principles to measure investment progress against both
the current approved baseline and the original baseline
for all major investments as required by SOP 90 52 1 and
OMB Circular A-130.
35 | Spring 2025 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
Report Date Issued Number Recommendation Date of Final Action
Number Management Target Date
Decision
24-10 3/29/2024 6 Perform oversight procedures as required in OMB Circular 09/27/2024 08/30/2024
A-11 and SOP 90 44. Specifically, ensure that post-
implementation reviews, business case closeouts,
TechStat sessions, operational analyses, and lessons
learned are completed.
24-16 5/15/2024 3 Enhance existing procedures using the framework in the 06/14/2024 09/30/2025
Government Accountability Office’s Green Book to design
and implement robust internal and quality control
processes to ensure complete and accurate reporting of
annual improper payment results and formalized risk
assessment processes to ensure all programs and activities
are considered sufficiently to meet PIIA reporting
objectives.
24-16 5/15/2024 4 Design and implement enforceable actions and controls to 06/14/2024 05/15/2025
hold lenders accountable for not providing all
documentation requested for loan samples in a timely
manner.
24-16 5/15/2024 5 Formally document and implement additional 06/14/2024 05/15/2025
preventative and monitoring controls to determine the
eligibility of loans prior to loan approval and payments and
loan guaranty purchases.
24-16 5/15/2024 6 Collaborate with the responsible staff involved in the 06/14/2024 05/15/2025
payment integrity reporting process to ensure timely and
complete reconciliations are performed on the
populations subject to sampling for improper payment
reviews.
24-16 5/15/2024 7 Exercise effective management review controls over the 06/14/2024 05/15/2025
statistician’s work product by verifying that the
documentation of the sampling and estimation
methodology plans comprehensively outlines the details
of the implemented sampling and extrapolation
methodology, while maintaining statistical validity.
24-16 5/15/2024 8 Design and implement effective communication and 06/14/2024 05/15/2025
review processes with responsible staff involved in the
payment integrity reporting process to ensure compliance
for the reporting of new programs and activities.
24-16 5/15/2024 10 Design and implement a formal review process to ensure 06/14/2024 05/15/2025
corrective actions plans developed, implemented, and
published are adequately addressing the true root causes
of improper and unknown payments.
Spring 2025 Semiannual Report to Congress | 36
U.S. Small Business Administration | Office of Inspector General
Report Date Issued Number Recommendation Date of Final Action
Number Management Target Date
Decision
24-17 5/21/2024 1 Review and appropriately resolve hold codes related to 08/08/2024 06/28/2025
the 5,044 7(a) loans to determine impact on 7(a) eligibility
and seek remedy or repayment of all 7(a) loans deemed
ineligible.
24-18 6/4/2024 1 Review each of the 1,614 loan and 2,029 grant potential 06/17/2024 05/30/2025
improper payments made to COVID-19 EIDL recipients we
identified in the finding as also being on Treasury’s Do Not
Pay List and determine if the applicants can rectify the
disqualifying information; if not, recover the funds.
24-20 7/9/2024 1 SBA’s Guaranty Purchases for Paycheck Protection 07/12/2024 05/30/2025
Program Loans
24-20 7/9/2024 2 Require personnel to conduct periodic monitoring and 07/12/2024 05/30/2025
reviews of SBA’s automated processes for PPP and future
stimulus loan programs to ensure all eligible loans are
reported to commercial credit reporting agencies, as
required.
24-20 7/9/2024 3 Identify the credit reporting agencies to whom SBA must 07/12/2024 05/30/2025
report current and delinquent loans for PPP and future
stimulus loan programs.
24-20 7/9/2024 4 Review charged-off PPP loans to ensure that all eligible 07/12/2024 05/30/2025
loans are referred to Treasury, as required.
24-20 7/9/2024 5 Require personnel to conduct periodic reviews of its 07/12/2024 05/30/2025
automated Treasury referral process for PPP and future
stimulus loan programs to ensure all eligible loans are
referred to Treasury, as required.
24-20 7/29/2024 6 Conduct lender reviews to ensure lenders complied with 09/27/2024 09/30/2025
their communication, servicing, and debt collection
activity requirements. If not, require the lender to bring
the loan into compliance or seek recovery of the guaranty
paid by SBA as appropriate.
24-20 7/9/2024 7 Require lenders to submit evidence of communication, 09/26/2024 09/30/2025
servicing, and debt collection activities with the borrower
prior to guaranty purchase for PPP and future similar
programs to foster and maintain program integrity.
24-23 8/15/2024 1 Revise regulations to require documents that can be 08/20/2024 07/30/2025
verified to ensure firms complied with 13 CFR §
126.200(d)(3), that a legacy employee resided in a
HUBZone for at least 180 days following the most recent
certification (or recertification).
37 | Spring 2025 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
Report Date Issued Number Recommendation Date of Final Action
Number Management Target Date
Decision
24-23 8/15/2024 2 Update and implement standard operating procedures to — —
request documents, as permitted under 13 CFR
126.304(b)(1), to verify during program examinations that
firms meet size standards in the North American Industry
Classification System code in which they perform on
HUBZone contracts.
24-23 8/15/2024 3 Improve the HCTS system notification module to ensure 08/20/2024 03/26/2025
recertification notifications are sent timely and
consistently to all HUBZone firms.
24-25 9/24/2024 1 Should the Navigator program continue, establish 12/20/2024 01/27/2025
performance targets to assess recipient’s progress
towards assisting underserved small business owners and
entrepreneurs.
24-25 9/24/2024 2 Should the Navigator program continue, enhance 12/20/2024 02/28/2025
guidance for grant recipients to use acceptable methods
to collect more complete client information reported to
program officials
24-25 9/24/2024 4 Establish and implement a risk-based process to compare — —
performance results for Navigator program grant
recipients and partner organizations that are also SBA
resource partners to ensure performance is separate and
discrete.
Significant Recommendations From This Reporting Period
Report Date Issued Title Recommendation Recommendation
Number Number
25-03 11/5/2024 Approved Disaster Assistance 1 Review the 187 loans that matched to a
Loans Matching COVID-19 EIDLs related COVID-19 EIDL or PPP loan with
and PPP Loans With Fraud Hold a fraud hold code for legitimacy and
Codes eligibility. If any of the 187 loans are
found to be illegitimate, ineligible, or
fraudulent, take appropriate action to 1)
prevent disbursement of funds, 2)
recover the funds, and 3) refer
potentially fraudulent loans to OIG.
25-04 11/13/2024 SBA’s Oversight of Non-Bank 1 Ensure that future application review
Lenders and Third-Party Service processes for non-bank PPP lenders
Providers Associated With PPP (including fintechs) requesting to
Loans participate in traditional SBA loan
programs include conducting reviews of
the lender’s compliance with PPP
requirements.
Spring 2025 Semiannual Report to Congress | 38
U.S. Small Business Administration | Office of Inspector General
Report Date Issued Title Recommendation Recommendation
Number Number
25-04 11/13/2024 SBA’s Oversight of Non-Bank 2 Enhance existing risk-based oversight
Lenders and Third-Party Service plans to ensure adequate oversight of
Providers Associated With PPP high-risk non-bank lenders, including
Loans Fintechs.
25-04 11/13/2024 SBA’s Oversight of Non-Bank 3 Ensure internal controls designed to
Lenders and Third-Party Service restrict access to only lender service
Providers Associated With PPP providers with accepted agreements to
Loans submit loan applications remain in place
to promote program integrity in all
lending programs.
25-04 11/13/2024 SBA’s Oversight of Non-Bank 4 Improve monitoring of lender/service
Lenders and Third-Party Service provider relationships to better
Providers Associated With PPP determine the extent of services being
Loans performed by service providers to
ensure compliance with SBA
requirements.
25-04 11/13/2024 SBA’s Oversight of Non-Bank 5 Reinforce existing guidance to lenders
Lenders and Third-Party Service on reporting lender service provider
Providers Associated With PPP relationships to SBA to ensure only
Loans accepted lender service providers are
participating and benefiting from SBA
programs.
25-04 11/13/2024 SBA’s Oversight of Non-Bank 6 Update guidance on lender
Lenders and Third-Party Service requirements for managing risks
Providers Associated With PPP associated with lender service provider
Loans relationships to align with 2023
Interagency Guidance.
25-06 12/5/2024 COVID-19: Data Sharing Project 1 Evaluate its authority to share data and
Finds Billions Paid to Same Likely develop fraud prevention resources and
Fraudsters Under Both the controls with other federal entities,
Unemployment Insurance and including SBA, that include data sharing
Economic Injury Disaster Loan mechanisms to detect and mitigate
Programs fraud.
25-06 12/5/2024 COVID-19: Data Sharing Project 2 Collaborate with SBA to conduct a joint
Finds Billions Paid to Same Likely study to assess and identify the UI claim
Fraudsters Under Both the data elements that should be shared for
Unemployment Insurance and data matching with disaster program
Economic Injury Disaster Loan data elements for the purpose of
Programs detecting potentially fraudulent
activities under both the UI and SBA
disaster assistance programs.
39 | Spring 2025 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
Report Date Issued Title Recommendation Recommendation
Number Number
25-06 12/5/2024 COVID-19: Data Sharing Project 3 Reevaluate eligibility for the 10,971
Finds Billions Paid to Same Likely potentially fraudulent EIDLs and recover
Fraudsters Under Both the funds from ineligible recipients.
Unemployment Insurance and
Economic Injury Disaster Loan
Programs
25-07 1/16/2025 SBA’s Use of Hold Codes for 1 Immediately flag with a hold code 50
Potentially Fraudulent PPP Loans the 45,761 lender-referred loans,
Referred by Lenders totaling $2.7 billion, suspected of fraud
or illegal activity and any other such
referred loans.
25-07 1/16/2025 SBA’s Use of Hold Codes for 2 Review 17,269 of the 45,761 lender-
Potentially Fraudulent PPP Loans referred loans, totaling $1.2 billion,
Referred by Lenders suspected of fraud or illegal activity that
have been forgiven and any other such
loans to ensure borrowers met eligibility
requirements. If not, seek recovery of
funds as appropriate.
25-07 1/16/2025 SBA’s Use of Hold Codes for 3 Immediately flag with a hold code 50
Potentially Fraudulent PPP Loans the 6,944 lender-referred loans, totaling
Referred by Lenders $365 million, suspected of fraud or
illegal activity, but not captured in
OCRM’s summary
25-07 1/16/2025 SBA’s Use of Hold Codes for 4 Review 5,130 of the 6,944 lender-
Potentially Fraudulent PPP Loans referred loans, totaling $139.1 million,
Referred by Lenders suspected of fraud or illegal activity that
have been forgiven and any other such
loans, to ensure borrowers met
eligibility requirements or seek recovery
of funds as appropriate.
25-07 1/16/2025 SBA’s Use of Hold Codes for 5 Establish sufficient procedures, such as
Potentially Fraudulent PPP Loans supervisory reviews and a reconciliation
Referred by Lenders process, to ensure all lender-referred
loans suspected of fraud or illegal
activity are captured in OCRM’s
summary workbook.
Significant Management Decisions With Which OIG Disagrees
There was one significant management decision OIG disagreed with during this reporting period in
SBA’s Oversight of HUBZone Program Participants’ Continuing Eligibility (Report 24-23), issued
August 15, 2024.
Spring 2025 Semiannual Report to Congress | 40
U.S. Small Business Administration | Office of Inspector General
Summary: SBA’s audit follow-up official determined management would not implement OIG’s
Recommendation 2, that the agency update and implement standard operating procedures to
request documents during program examinations, as permitted under 13 CFR 126.304(b)(1), to
verify that a firm meets size standards under the NAICS code under which it performs HUBZone
contracts.
SBA disagreed with the recommendation, emphasizing that at the time of certification (or
recertification), a firm’s size cannot be determined categorically but only in relation to an
individual procurement action. SBA further disagreed with OIG’s interpretation that size, as a
component of eligibility, is explicitly required. SBA believes that existing safeguards for the
contracting officer to verify the firm’s self-attestations of its certification status in the database at
the time of award is sufficient to reduce the risk of ineligible firms receiving HUBZone contract
benefits.
The audit follow-up official decided the agency would continue allowing HUBZone firms to self-
certify that they meet size standards but address OIG’s concerns by implementing additional
procedures to monitor contract volume and increase training. While these additional procedures
will help program officials identify firms with indicators that revenue exceeds size standards
applicable to the industry code for their business, that is only part of the equation for assessing
size. For many industry codes, size is calculated based on total income plus the cost of goods sold.
There are also many industry codes where size is determined based on the average number of
employees. While OIG believes more robust procedures to verify that firms meet size standards is
essential to reduce the risk of certifying ineligible firms, OIG has closed the recommendation.
Significant Revised Management Decisions
There were no significant revised management decisions during this reporting period.
Federal Financial Management Improvement Act of 1996
Our independent auditors, KPMG, reported in the 2024 financial statements audit that
management did not establish and maintain financial management systems that substantially
comply with Federal Financial Management Improvement Act of 1996 requirements. These areas
related to control deficiencies over transactions arising from the implementation of the
Coronavirus Aid, Relief, and Economic Security (CARES) Act and related legislation. The auditors
found financial reporting controls do not ensure compliance objectives are met, and do not ensure
budgetary resources are safeguarded against waste, loss, and misuse.
41 | Spring 2025 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
Specifically, management was unable to provide evidence that the accounting treatment and
financial reporting of the recovery of funds related to the RRF, SVOG, COVID-19 EIDL, and PPP
programs were in accordance with U.S. generally accepted accounting principles. Substantial non-
compliance with the Federal Financial Management Act increases the risk that transactions are
incorrectly recorded in the general ledger and that balances in the consolidated financial
statements are not accurate.
Federal Managers Financial Integrity Act of 1982
KPMG reported in the 2024 financial statements audit that management performed an internal
control assessment as required under the Federal Managers Financial Integrity Act of 1982.
However, management’s assessment did not substantially comply with the Act and the related
Office of Management and Budget (OMB) Circular No. A-123 requirements due to the urgent need
to implement the provisions of the CARES Act and related legislation as quickly and efficiently as
possible, and other inherent challenges faced in implementing and expanding programs.
Substantially not complying with the Federal Managers Financial Act and other related OMB
Circular No. A-123 requirements may lead to not identifying the appropriate risks and key controls
and not detecting internal control or compliance deficiencies. The risks of not detecting and
correcting control deficiencies could result in misstatements to the consolidated financial
statements.
Instances of Interference
There were no attempts by SBA officials to interfere with OIG independence during this reporting
period.
Spring 2025 Semiannual Report to Congress | 42
U.S. Small Business Administration | Office of Inspector General
Appendix D: Investigations Reporting Statistics
Investigative Reports Issued
Report Type Number of Reports
Report of Investigation 165
Preliminary Case Closing Reports of Investigation 0
Total 165
Persons Referred for Prosecution
Referred to Number of Persons*
Department of Justice (or other) 81
State Attorney 3
Local (other) Attorney 14
Total 98
* Number includes people and entities referred for prosecution.
Pandemic-Related Investigative Statistics
SBA OIG Investigations Indictments/Complaints Arrests Convictions
(opened)
PPP/EIDL/RFF/SV* 89 86 44 109
Investment Fraud 6 4 1 8
Total 95 90 45 117
* PPP stands for Paycheck Protection Program; EIDL stands for Economic Injury Disaster Loan; RFF stands for Restaurant Revitalization Fund; SV
stands for Shuttered Venue Operators Grant.
Whistleblower Retaliation Cases
There were no OIG investigations involving whistleblower retaliation cases during this semiannual
period.
Investigations Involving a Senior Government Employee in
Which Misconduct was Substantiated
There were no OIG investigations involving a senior government employee where misconduct was
substantiated during this semiannual period.
43 | Spring 2025 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
Investigations Involving a Senior Government Employee That
are Closed and Not Disclosed to the Public
There were no nonpublic, closed investigations of senior government employees during this
semiannual period.
Spring 2025 Semiannual Report to Congress | 44
U.S. Small Business Administration | Office of Inspector General
Appendix E: Legal Actions Summary
Legal Actions, October 1, 2024–March 31, 2025
State Program Jointly With Alleged Violation(s) Prosecuted Legal Action
TX BL USSS Individual made material Individual was sentenced to 9
misrepresentations to a financial months incarceration, 2 years
institution to gain approval for a PPP supervised release, and ordered to
loan and obtained over $400,000 by pay $405,340 in restitution.
providing materially false information
on loan applications regarding the
existence of employees and false
representation of their salaries.
TN DL FBI, FDIC, TIGTA Individual submitted multiple Individual was sentenced to 51
fraudulent PPP and EIDL applications months incarceration, 3 years
with fraudulent tax forms for supervised release, and ordered to
businesses with no ownership pay $990,570 in restitution.
interest.
FL DL, IA FBI, USSS Individual made materially false Individual was sentenced to 96
statements on multiple EIDL months incarceration, 36 months
applications regarding the existence, supervised release, and ordered to
operation, and financial performance pay $1 million in joint restitution.
of businesses in a scheme to defraud
the SBA EIDL program of $3.3 million.
GA BL FBI, FDIC Individual conspired to defraud SBA Individual was sentenced to 30
by submitting materially false PPP months incarceration, 3 years
loan applications and supporting supervised release, and ordered to
documents in a scheme to obtain pay $1.1 million in restitution.
over $24 million.
NE DL FBI Individual submitted multiple Individual was sentenced to 60
fraudulent EIDL and PPP loan months supervised release and
applications, including falsified ordered to pay $210,846 in
supporting documentation, for their restitution.
companies and others to obtain over
$2.6 million in PPP and EIDL funds.
PA BL, RRF FBI, HSI Subject submitted fraudulent PPP and Subject was sentenced to 21
RRF applications to SBA regarding the months incarceration and 12
status of their business in a scheme months supervised release.
that resulted in them obtaining over
$957,000.
45 | Spring 2025 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
AZ DL HIS, USSS, TIGTA Individuals submitted multiple Individual 1 was sentenced to 24
fraudulent EIDL and PPP applications months incarceration, 36 months
using false information and obtained supervised release, ordered to pay
over $5.7 million in EIDL and PPP $2 million in restitution. Individual
loans. 2 was sentenced to 20 months
incarceration, 36 months
supervised release, and ordered to
pay $1 million in restitution.
Individual 3 was sentences to 72
months incarceration, 72 months
supervised release, and ordered to
pay $403,253. Individual 4 was
sentenced to 36 supervised release
and ordered to pay $720,000 in
restitution. Individual 5 was
sentenced to 20 months
incarceration, 36 months
supervised release, and ordered to
pay $650,808 in restitution.
WA BL, DL FBI, TIGTA Individuals defrauded SBA and Individual 1 was sentenced to 60
financial institutions of over $16.7 months supervised release and
million in PPP loans and EIDLs. ordered to pay $310,000 in
restitution. Individual 2 was
sentenced to 196 months
incarceration, 36 months
supervised release, and ordered to
pay $16.3 million in restitution.
MI DL FBI Individuals devised a multi-million Individual 1 was sentenced to 20
dollar scheme to defraud SBA, private months incarceration, 36 months
lenders using false and fraudulent supervised release, and ordered to
information. pay $639,360 in restitution.
Individual 2 was sentenced to 40
months incarceration and 36
months of supervised release.
Individual 3 was sentenced to 36
months of supervised release.
Individual 4 was sentenced to 42
months incarceration and 36
months of supervised release.
Individual 5 was sentenced to 60
months and 36 months of
supervised release. Individual 6
was sentenced to 12 months
incarceration and 36 months of
supervised release.
Spring 2025 Semiannual Report to Congress | 46
U.S. Small Business Administration | Office of Inspector General
OK DL FRB OIG Subject conspired with others to Subject was sentenced to 12
defraud SBA by submitting over 40 months incarceration, 36 months
materially false EIDL applications supervised release, and ordered to
using others personally identifiable pay $250,000 in restitution.
information.
IA BL FBI, FDIC, DHS HSI Individuals recruited associates and Individual 1 was sentenced to 10
submitted PPP applications months incarceration, 3 years
containing materially false supervised release, and ordered to
information in a scheme that netted pay $60,744 in restitution.
over $2.5 million in PPP loans. Individual 2 was sentenced to 6
months incarceration, 24 months
supervised release, and ordered to
pay $75,417 in restitution.
WA DL USSS Subject fraudulently applied for and Subject was sentenced to 9
received a $126,000 EIDL and failed months incarceration, 36 months
to report any business to the Kings supervised release, and was
County Housing Authority where she ordered to pay $126,400 in
receives Section 8 subsidized housing restitution.
assistance.
HI BL FDIC, IRS CI, FRB Individuals submitted multiple Individual 1 was sentenced to 36
OIG fraudulent PPP loan applications to months incarceration, 3 years of
various banks and obtained supervised release. Individual 2
approximately $1.3 million. The PPP was sentenced to 27 months
applications contained false and incarceration, 3 years supervised
fraudulent documents, including IRS release. Individuals were ordered
forms, employee wages, and payroll to pay $1.4 million in joint
summaries. Individuals transferred restitution.
the PPP funds to their own accounts
for personal expenses, including a
vehicle, mortgage payments on their
home, and a down payment on a
condo located in Hawaii.
IL BL, DL IRS CI Individual received PPP loans and Individual was sentenced to 6
EIDLs issued to businesses who were months incarceration, 3 years
assigned a Federal Employer supervised release, and ordered to
Identification Number on or after pay $1.3 million in restitution.
Feb. 15, 2020. The applications
contained materially false statements
and misrepresentations concerning
the applicant’s payroll and fraudulent
state payroll tax returns resulting in
$1.3 million in funding.
GA BL USSS, TIGTA Subject fraudulently obtained $1.2 Subject was sentenced to 37
million in PPP loans for a nonexistant months incarceration, 36 months
company. supervised release, and was
ordered to pay $1.2 million in
restitution.
47 | Spring 2025 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
FL BL FBI, FDIC Individual made multiple false Individual was sentenced to 135
statements and submitted fraudulent months incarceration, 60 months
PPP loan applications on behalf of supervised release, and ordered to
entities they controlled. pay $4.2 million in restitution.
OR DL, BL FBI, TIGTA Individuals schemed to defraud SBA Individual 1 was sentenced to 2
by submitting false and fraudulent months of home confinement, 36
EIDL applications misrepresenting the months supervised release, and
number of employees, gross 600 hours of community service.
revenues, and business establishment Individual 2 was sentenced to 2
dates. As a result, they fraudulently months of home confinement, 36
obtained over $628,443 in PPP and months of supervised release, and
EIDL funds. 600 hours of community service.
CA DL, BL DHS HSI, USPIS Individual was involved in a fraud ring Individual was sentenced to 105
using stolen personally identifying months incarceration, 3 years
information to apply for PPP and EIDL supervised release, and ordered to
funds on behalf of fictitious pay $677,151 in restitution.
businesses, falsely claiming the
businesses had large payrolls.
MD BL, DL FBI Multiple individuals conspired to Individual 1 was sentenced to 65
fraudulently obtain PPP and EIDL months incarceration, 3 years
funds for nonexistant businesses. The supervised release, and ordered to
materially false statements included pay $3 million in restitution.
information pertaining to payroll, Individual 2 was sentenced to 48
revenue, and the number of months incarceration, 3 years
employees. There were also acts of supervised release, and ordered to
kickbacks and bribery. They used the pay $1.3 million in restitution.
$14.2 million to purchase luxury
goods.
TX BL TIGTA Individuals submitted false PPP loan Individual 1 was sentenced to 286
applications in the name of entities months incarceration, 3 years
under their ownership and control to supervised release, and ordered to
various banks to fraudulently obtain pay $3 million in restitution.
over $3 million in PPP loans. Individual 2 was sentenced to 108
months incarceration, 3 years
supervised release, and ordered to
pay $3 million in restitution.
Individual 3 was sentenced to 60
months supervised release and
ordered to pay $1.6 million in
restitution.
MN DL FDIC, FRB OIG, Individual while employed by a Individual 1 was sentenced to 12
TIGTA financial institution, provided false months probation and ordered to
information to SBA on multiple EIDL pay $9,000 in restitution.
applications, resulting in over
$250,000 in disbursements.
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U.S. Small Business Administration | Office of Inspector General
FL BL FBI, DHS HSI, IRS Individual conspired to fraudulently Individual 1 was sentenced to 18
CI, USSS obtain funds by means of materially months incarceration, 3 years
false representations on PPP and EIDL supervised release, and ordered to
applications seeking over $25 million. pay $2.4 million in restitution.
OR DL FBI Subject fraudulently received EIDL Subject was sentenced to 6
funding on behalf of several months home confinement, 3
businesses, some of which were years supervised release, and
fictitious companies, and used the ordered to pay $33,314 in
funds for personal use. restitution.
TX BL FBI, DOI OIG Individual conspired with others to Individual was sentenced 3 years
defraud SBA by submitting multiple probation and ordered to pay
fraudulent PPP and EIDL applications $210,627 in restitution.
netting over $1.9 million.
CA DL FBI, IRS CI Individual, a convicted felon, Individual was sentenced to 40
fraudulently received an EIDL for months incarceration, 3 years
$150,000 and also evaded taxes. supervised release, and ordered to
pay $1.4 million in restitution.
WA BL DOL OIG, USSS Subject submitted a fraudulent PPP Subject was sentenced to 60
loan application for $20,833 and months probation and ordered to
supporting documentation for a pay $39,848 in restitution.
fictitious business.
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U.S. Small Business Administration | Office of Inspector General
TX DL, IA FBI, TIGTA Subjects conspired with others to Subject 1 was sentenced to 1
defraud SBA by accessing agency month incarceration, 36 months
databases for borrower information supervised release, and ordered to
to apply manipulate, fabricate, and pay $200,000 in restitution.
upload fraudulent IRS and SBA forms Subject 2 was sentenced to 1
used to process EIDLs, making it month incarceration, 60 months
possible for ineligible individuals to supervised release, and ordered to
receive EIDL funding. pay $198,500 in restitution.
Subject 3 was sentenced to 6
months incarceration, 60 months
supervised release, and ordered to
pay $200,000 in restitution.
Subject 4 was sentenced to 36
months probation, and ordered to
pay $210,000 in restitution.
Subject 5 was sentenced to 1
month incarceration, 60 months
supervised release, and ordered to
pay $200,000 in restitution.
Subject 6 was sentenced to 3
months incarceration, 36 months
supervised release, and ordered to
pay $212,625 in restitution.
Subject 7 was sentenced to 36
months supervised release, and
ordered to pay $197,900 in
restitution. Subject 8 was
sentenced to 18 months
incarceration, 60 months
supervised release, and ordered to
pay $200,000 in restitution.
Subject 9 was sentenced to 1
month incarceration, 60 months
supervised release, and ordered to
pay $210,000 in restitution.
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U.S. Small Business Administration | Office of Inspector General
OK BL CIGIE, HUD OIG, Subjects submitted false statements Subject 1 was sentenced to 36
IRS CI, SSA OIG, and fraudulently applied for multiple months probation and ordered to
USPIS, VA OIG PPP loans for over $2.6 million while pay $41,665 in restitution. Subject
living in the HUD Section 8 Housing 2 was sentenced to 48 months
Program. supervised release, 120 months
home confinement, and ordered to
pay $85,800 in restitution. Subject
3 was sentenced to 33 months
incarceration, 36 months
supervised release, and ordered to
pay $1.3 million in restitution.
Subject 4 was sentenced to 33
months incarceration and ordered
to pay $70,832 in restitution.
IA DL USDA OIG, FDIC, Individual applied for and received Individual 1 was sentenced to 188
DHS HSI, DOL OIG EIDL funds with false statements of months incarceration, 36 months
the status of the business. supervised release, and ordered to
pay $5.7 million in restitution.
51 | Spring 2025 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
PR DL, BL TIGTA, IRS CI, USSS Individuals participated in an Individual 1 was sentenced to 18
organized fraud ring that recruited months incarceration, 36 months
others to defraud the PPP and EIDL supervised release. Individual 2
programs to receive over $9 million in and 3 were sentenced to 24
funding, collecting kickbacks. months probation. Individual 4, 5,
and 6 were sentenced to 12
months probation. Individual 7 was
sentenced to 6 months probation.
Individual 8 and 9 were sentenced
to 12 months probation. Individual
10 and 11 were sentenced to 24
months probation. Individual 12,
13, and 14 were sentenced to 12
months probation. Individuals 15-
19 were sentenced to 24 months
probation. Individual 20 was
sentenced to 12 months probation.
Individuals 21-24 were sentenced
to 24 months probation. Individual
25 was sentenced to 12 months
probation. Individual 26 was
sentenced to 37 months
incarceration and 60 months
supervised release. Individual 27,
28, and 29 were sentenced to 12
months probation. Individual 30
was sentenced to 24 months
probation. Individual 31 was
sentenced to 12 months probation.
Individual 32 was sentenced to 30
months incarceration and 36
months supervised release.
Individual 33, 34, and 35 were
sentenced to 24 months probation.
Individual 36 was sentenced to 33
months incarceration and 60
months probation. Individual 37
was sentenced to 24 months
probation. Individual 38 was
sentenced to 12 months probation.
Individual 39 was sentenced to 24
months probation. Individual 40
was sentenced to 27 months
incarceration and 60 months
supervised release. Individual 41
was sentenced to 12 months of
probation. Individual 42 was
sentenced to 24 months probation.
Spring 2025 Semiannual Report to Congress | 52
U.S. Small Business Administration | Office of Inspector General
Individuals 43-48 were sentenced
to 12 months probation.
Individuals were ordered to pay
$9 million in restitution.
GA DL, BL FBI Individual applied for and received Individual was sentenced to 66
$600,000 in EIDLs and PPP loans on months incarceration, 3 years
behalf of her employer’s company supervised release, and ordered to
and used portions of the funds for pay $298,042 in restitution.
personal use.
WA BL, DL FBI, USPIS DOL Individual conspired to use over 630 Individual was sentenced to 54
OIG, IRS CI stolen identities to obtain $25 million months incarceration, 3 years
in COVID-19 related benefits. supervised release, and ordered to
Individual fraudulently obtained pay $1.3 million in restitution.
$2.4 million in funds.
ID DL TIGTA Subject applied for and fraudulently Subject was sentenced to 2
received a total of $927,400 in CARES months incarceration, 3 years
Act funding through false applications supervised release, and ordered to
and documents. pay $927,400 in restitution.
OR BL, DL TIGTA, NCIS, IRS CI Subject made multiple false Subject was sentenced to 36
statements and attempted to obtain months supervised release and
multi-million dollar PPP loans and ordered to pay $120,405 in
EIDLs. restitution.
CA DL, BL FBI, HHS OIG Subject made multiple false Subject was sentenced to 36
statements and attempted to obtain months of supervised release and
EIDL and PPP loans over $850,000. ordered to pay $500,000 in
Subject transferred the proceeds to restitution.
an investment fund for personal use.
CO DL USSS As part of the scheme, subject Subject was sentenced to 8
fraudulently applied for $867,700 in months incarceration, 36 months
EIDLs and PPP loans, obtaining supervised release, and ordered to
$673,500. pay $673,500 in restitution.
AK DL, BL DHS HSI Subject made false statements about Subject was sentenced to 13
the lack of criminal history in several months incarceration, 3 years
EIDL and PPP applications and supervised release, and ordered to
secured $626,683 in funding. pay $122,500 in restitution.
GA DL TIGTA Individuals conspired to defraud SBA Individual 1 was sentenced to 32
and received $595,265.00 in months incarceration, 3 years
fraudulently obtained PPP funds and supervised release. Individual 2
$20,000 in EIDL grants. was sentenced to 28 months
incarceration, 36 months
supervised release. Individuals
were ordered to pay $931,208 in
joint restitution.
WA BL, DL DHS HSI, DHS OIG, Individual fraudulently obtained an Individual was sentenced to 45
TIGTA EIDL and multiple PPP loans, totaling months incarceration, 60 months
$157,881 by making fraudulent supervised release, and ordered to
claims on loan applications. pay $203,347 in restitution.
53 | Spring 2025 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
CA DL, BL FBI, IRS Subject submitted false and Subject was sentenced to 35
fraudulent EIDL and PPP applications months incarceration, 24 months
for more than $2.5 million for four supervised release, and was
fabricated businesses. ordered to pay $2 million in
restitution.
FL DL FBI Miami-Dade Corrections Officer, Subject was sentenced to 36
fraudulently submitted an EIDL months of probation and 8 months
application seeking over $149,900 in of home confinement.
COVID-19 relief funds for a business
that did not exist.
CO BL IRS Individual devised and participated in Individual was sentenced to 24
a scheme to defraud the PPP loan months incarceration, 3 years
program with inflated payroll costs supervised release, and ordered to
and gross receipts, made false pay $549,274 in restitution.
statements and certifications, and
submitted fabricated tax documents
and payroll reports.
FL BL USSS Individuals participated in an Individual 1 was sentenced to 26
organized criminal enterprise to steal months incarceration and 3 years
$766,000 in PPP loan proceeds. supervised release. Individual 2
was sentenced to 71 months
incarceration, 3 years supervised
release, and ordered to pay
$14.5 million in restitution.
AL DL DOL, DOJ, DHS HSI Subject was incarcerated and devised Subject was sentenced to 186
a scheme with other individuals to months incarceration, 5 years
steal identities to obtain $3.3 million supervised release, and ordered to
in EIDLs that were laundered via bank pay $269,821 in restitution and
accounts created using the stolen $90,951 in joint restitution.
identities.
DC BL, DL USDA Individual received PPP and EIDL Individual was sentenced to 15
funding for nonexistant businesses months incarceration, 2 years
while working for USDA. The funds supervised release, and ordered to
were used to purchase a home in the pay $844,415 in restitution.
name of her mother, an SBA
employee.
CA BL IRS Subject secured $3 million in PPP Subject was sentenced to 18
loans and EIDLs using false business months incarceration, 36 years
information and then used the funds supervised release, and ordered to
for personal expenses. pay $2.9 million in restitution.
HI BL IRS, TIGTA Individual fraudulently submitted Individual was sentenced to 87
false documents in PPP and EIDL months incarceration, 60 months
applications to obtain approximately supervised release, 12,000 hours
$12 million in COVID-19 relief funds. of community service, and ordered
to pay $12.8 million in restitution.
Spring 2025 Semiannual Report to Congress | 54
U.S. Small Business Administration | Office of Inspector General
GA DL FBI, USSS, TIGTA Subject obtained $1 million in EIDLs Subject was sentenced to 46
with the stolen identies of 43 people months incarceration, 3 years
and false business information. supervised release, and ordered to
pay $210,000 in restitution.
CA BL FBI Subject submitted false and Subject was sentenced to 36
fraudulent PPP loan applications months probation, 24 months
using false business information. home confinement, 576 hours
community service, and ordered to
pay $166,055 in restitution.
TX BL FDIC, FHFA, DHS A Certified Public Accountant and his Individual was sentenced to 6
HSI, TIGTA employees recruited individuals to months incarceration, 3 years
apply for PPP loans, charging up to supervised release, and ordered to
50% of the loan proceeds. The pay $164,250 in restitution.
individuals created false documents
and entered misleading information
on the PPP applications.
UT BL, DL FBI, TIGTA Company owner provided gratuities Individual was sentenced to time
and bribes to government officials in served, 24 months supervised
exchange for government contracts. release, and ordered to pay
$48,507 in restitution.
FL BL FDIC, FBI Individaul submitted fraudulent PPP Individual was sentenced to 135
loan applications on behalf of entities months incarceration, 60 months
they controlled. supervised release, and ordered to
pay $4.2 million in restitution.
WA DL DOE OIG Individual fraudulently applied for Individual was sentenced to 12
$422,242 PPP loans using false months probation and ordered to
information. pay $493,865 in restitution.
TN BL FDIC, FHFA, USSS, Individual used stolen identitites to Individual was sentenced to 30
TIGTA obtain PPP funds, submitted months incarceration, 3 years
fraudulent documents, and used the supervised release, and order to
funds for personal purchases. pay $786,712 in restitution.
The following lists define the program codes for legal actions and the abbreviations in the table.
Legal Actions Summary Program Codes
BL = Business Loans
DL = Disaster Loans
GC = Government Contracting and Section 8(a) Business Development
RRF = Restaurant Revitalization Fund
IA = Internal Affairs
OT = Other
Joint Investigation Agency Acronyms
Council of the Inspectors General on Integrity and Efficiency (CIGIE)
Defense Criminal Investigative Service (DCIS)
Department of Commerce Office of Inspector General (DOC OIG)
Department of Energy Office of Inspector General (DOE OIG)
Department of Labor Office of Inspector General (DOL OIG)
Department of Health and Human Services Office of Inspector General (HHS OIG)
55 | Spring 2025 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
Department of Homeland Security Homeland Security Investigations (DHS HSI)
Department of Homeland Security Immigration and Customs Enforcement (DHS ICE)
Department of Homeland Security Office of Inspector General (DHS OIG)
Department of the Interior Office of Inspector General (DOI OIG)
Department of Justice Office of Inspector General (DOJ OIG)
Department of Justice Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF)
Department of State Office of Inspector General (DOS OIG)
Department of Transportation Office of Inspector General (DOT OIG)
Department of Treasury Inspector General for Tax Administration (TIGTA)
Department of Treasury Special Inspector General for the Troubled Asset Relief Program (SIGTARP)
Department of Veterans Affairs Office of Inspector General (VA OIG)
Federal Bureau of Investigation (FBI)
Federal Deposit Insurance Corporation Office of Inspector General (FDIC OIG)
Federal Housing Finance Agency Office of Inspector General (FHFA OIG)
Federal Reserve Board Office of Inspector General (FRB OIG)
General Services Administration Office of Inspector General (GSA OIG)
Internal Revenue Service Criminal Investigation (IRS CI)
National Aeronautics and Space Administration Office of Inspector General (NASA OIG)
Social Security Administration Office of Inspector General (SSA OIG)
State of California Employment Development Department (State of CA EDD)
United States Airforce Office of Special Investigations (AFOSI)
United States Army/Criminal Investigation Division (Army CID)
United States Department of Agriculture Office of Inspector General (USDA OIG)
United States Naval Criminal Investigative Service (NCIS)
United States Postal Inspection Service (USPIS)
United States Secret Service (USSS)
Spring 2025 Semiannual Report to Congress | 56
U.S. Small Business Administration | Office of Inspector General
Appendix F: Cosponsored and Other Activities
SBA’s authorization to cosponsor events requires OIG to report to Congress on the Administrator’s
use of that authority semiannually. The following list of activities was provided by the SBA Office of
Strategic Alliances.
Name/Subject of Event Name of Cosponsor(s) Event Location Date Fully Executed
Are you Lender Ready? Northern Rhode Island Chamber of Online 10/3/2024
Commerce
Town Hall with City of Kinston and SBA City of Kinston City of Kinston, NC 10/10/2024
Upstate NY Matchmaker Syracuse DO - New York Business Albany, NY 10/22/2024
Development Corp. DBA Pursuit
Lending, NYSTEC, State University of
New York, University of Albany Small
Business Development Center
2025 National Small Business Week SCORE Association Washington, DC; 10/23/2024
Boise, ID; Phoenix,
AZ; Nashville, TN;
Hartford, CT; and
virtual
Washington Small Business Fair Washington Small Business Spokane, WA; 10/24/2024
(Washington Biz Fair) Development Center, Washington State Puyallup, WA; and
Governor’s Office for Regulatory Pasco, WA
Innovation and Assistance, Washington
State Department of Commerce and
Pierce College Puyallup
Contracting, Business Matchmaking, State of Hawaii Department of Hawaii statewide 10/29/2024
Financing, Lender’s Conference and Transportation, Office of Civil Rights
Small Business Outreach Events Disadvantaged Business Enterprise
2025 Nevada Small Business Awards AAPI Chamber of Commerce Las Vegas, NV 10/29/2024
Lunch
2025 National Small Business Week Albuquerque Hispano Chamber of Albuquerque, NM 11/7/2024
Awards Breakfast Commerce
Government Procurement Training University of North Dakota Webinars and in- 11/14/2024
Series for FY 2025 person training
events at various
locations
throughout North
Dakota
ASCENT: Contract Ready Utah APEX Accelerator, a division of the Virtual 12/3/2024
Utah Governor’s Office of Economic
Opportunity
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U.S. Small Business Administration | Office of Inspector General
Name/Subject of Event Name of Cosponsor(s) Event Location Date Fully Executed
Asian Small Business Finance Summit Lotus Entrepreneurship Institute DBA Boston, MA 12/3/2024
ElevAsian, Initiative for a Competitive
Inner City and Asian Business
Empowerment Council
New Hampshire Small Business NH Small Business Development Center Virtual and in- 12/16/2024
Matchmaker and NH APEX Accelerator person (Pembroke,
NH)
2025 National Small Business Week Visa USA Inc. Washington, DC; 12/16/2024
Boise, ID; Phoenix,
AZ; Nashville, TN;
Hartford, CT; and
virtual
Atlanta Technical College Innovation Atlanta Technical College Atlanta, GA 1/8/2025
and Pop Up Business Incubator and
follow-up small business events at the
Small Business Center at Atlanta
Technical College
Norwood Area Capital and Resources Town of Norwood Norwood, MA 1/15/2025
Matchmaker
Rhode Island National Small Business Skills for Rhode Island’s Future Warwick, RI 1/15/2025
Week – Congressional Breakfast and
Salute to Small Business Awards
Luncheon
2025 National Small Business Week Lockheed Martin Corp. Washington, DC; 1/17/2025
Boise, ID; Phoenix,
AZ; Nashville, TN;
Hartford, CT; and
virtual
2025 National Small Business Week Verizon Communications Washington, DC; 1/18/2025
Boise, ID; Phoenix,
AZ; Nashville, TN;
Hartford, CT; and
virtual
Small Business Outreach, Counseling City and County of Honolulu Office of State of Hawaii 1/28/2025
and Training Opportunities Economic Revitalization
National Small Business Week 2025 T-Mobile USA Inc. Washington, DC; 2/1/2025
Boise, ID; Phoenix,
AZ; Nashville, TN;
Hartford, CT; and
virtual
National Small Business Week 2025 BLOCK Inc. Washington, DC; 2/7/2025
Boise, ID; Phoenix,
AZ; Nashville, TN;
Hartford, CT; and
virtual
Spring 2025 Semiannual Report to Congress | 58
U.S. Small Business Administration | Office of Inspector General
Name/Subject of Event Name of Cosponsor(s) Event Location Date Fully Executed
Connect & Innovate Small Business Skills for Rhode Island’s Future Warwick, RI 2/12/2025
Empowerment Summit
2025 National Small Business Week Constant Contact Inc Washington, DC; 2/21/2025
Boise, ID; Phoenix,
AZ; Nashville, TN;
Hartford, CT; and
virtual
2025 National Small Business Week Google LLC Washington, DC; 2/24/2025
Boise, ID; Phoenix,
AZ; Nashville, TN;
Hartford, CT; and
virtual
2025 National Small Business Week Worldpay Washington, DC; 2/24/2025
Boise, ID; Phoenix,
AZ; Nashville, TN;
Hartford, CT; and
virtual
Capital & Contracting Matchmaker – Roxbury Community College Boston, MA 2/25/2025
Celebrating Black History Month
2025 Northern Ohio Small Business Corporate College (a division of Warrensville 2/25/2025
Week & Lender Awards Celebration Cuyahoga Community College) Heights, OH
Utah National Small Business Week Mountain America Federal Credit Union West Jordan, UT 3/7/2025
Awards Event and Utah Small Business Development
Center Network
2025 SBA West Virginia Small Business Bank of Charles Town/The Community’s Fairmont, WV 3/12/2025
Week Awards Luncheon Event Bank; Community Trust Bank; First
Community Bank; The Huntington
National Bank; WesBanco Bank Inc
2025 National Small Business Week U.S. Bancorp (U.S. Bank) Washington, DC; 3/18/2025
Boise, ID; Phoenix,
AZ; Nashville, TN;
Hartford, CT; and
virtual
2025 National Small Business Week Paychex Inc. Washington, DC; 3/20/2025
Boise, ID; Phoenix,
AZ; Nashville, TN;
Hartford, CT; and
virtual
59 | Spring 2025 Semiannual Report to Congress
U.S. Small Business Administration | Office of Inspector General
Appendix G: External Peer Reviews
Section 5(a) of the IG Act requires offices of inspector general to report peer review results in their
semiannual reports to Congress. The following information is provided in accordance with these
requirements.
Audits Division
The Government Auditing Standards, or Yellow Book, issued by the Comptroller General of the
United States, requires that audit organizations performing audits and attestation engagements in
accordance with the Yellow Book must have an external peer review performed by reviewers
independent of the audit organization being reviewed at least once every 3 years. OIG’s Audits
Division was reviewed by the National Railroad Passenger Corporation OIG for the period ending
March 31, 2024. SBA OIG received a peer review rating of pass.
Similarly, the Council of the Inspectors General on Integrity and Efficiency (CIGIE) requires that
organizations that conduct inspections and evaluations under the Quality Standards for Inspection
and Evaluation, or Blue Book, must have an external peer review at least once every 3 years.
During FY 2023, our Audits Division underwent a Blue Book peer review conducted by the Board of
Governors of the Federal Reserve System OIG. SBA OIG generally met Blue Book standards.
Investigations Division
Section 6(e)(7) of the IG Act, Attorney General Guidelines for Offices of Inspector General with
Statutory Law Enforcement Authority, and the CIGIE Quality Standards for Investigations require
external peer reviews of OIG investigative functions be conducted every 3 years.
In May 2023, Treasury OIG reviewed our Investigations Division and issued a final report on
June 6, 2023. Treasury OIG found that the system of internal safeguards and management
procedures for the investigative function of OIG complied with the quality standards established
by CIGIE and the applicable Attorney General’s guidelines. No recommendations were offered.
Spring 2025 Semiannual Report to Congress | 60
U.S. Small Business Administration | Office of Inspector General
Appendix H: Office of Inspector General Reporting
Requirements
Under the Inspector General Act of 1978, as amended, OIG provides independent, objective
oversight to improve the integrity, accountability, and performance of SBA and its programs for
the benefit of the American people.
Although SBA’s programs are essential to strengthening America’s economy, the agency faces
several challenges in carrying out its mission. Access our annual report of the agency’s top
management and performance challenges on our OIG Reports web page.
OIG plays a critical role in addressing these and other challenges by conducting audits to identify
wasteful expenditures and program mismanagement; investigating fraud and other wrongdoing;
and taking other actions to deter and detect waste, fraud, abuse, and inefficiencies in SBA
programs and operations.
OIG’s activities also help to ensure that SBA employees possess a high level of integrity. This is
critical to the proper administration of SBA’s programs because it helps ensure SBA resources are
used by those who need them the most. Copies of OIG reports and other products are available at
our OIG Reports web page.
Reporting Requirements in the Inspector General Act of 1978, As
Amended, 5 USC Chapter 4
Section Reporting Requirement Location
404(a)(2) Review of legislation and regulations Other Significant OIG Activities
405(b)(1) Significant problems, abuses, and deficiencies Throughout
405(b)(2) Recommendations with respect to significant Significant Recommendations From This Reporting
problems, abuses, and deficiencies Period
405(b)(3) Prior significant recommendations on which Significant Recommendations From Prior Reporting
corrective action has not been completed Periods Without Final Action as of September 30,
2019
405(b)(4) Matters referred to prosecutive authorities Legal Actions Summary
406(c)(2) Instances in which requested information was N/A
refused
405(b)(6) List of audit, inspection, and evaluation reports Reports Issued; Reports With Questioned Costs
405(b)(7) Significant reports Throughout
405(b)(8),(9) & Audit, inspection, and evaluation statistical tables Statistical Highlights
(17)
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405(b)(9) Audit, inspection, and evaluation statistical tables Statistical Tables With Recommendations That Funds
with recommendations that funds be put to better Be Put to Better Use
use
405(b)(10) Audit, inspection, and evaluation reports without Reports from Prior Periods With Overdue
management decision, without comment within 60 Management Decisions; Reports From Prior Periods
days, or with unimplemented recommendations With Open Recommendations as of September 30,
2019
405(b)(11) Revised management decisions Significant Revised Management Decisions
405(b)(12) Management decisions with which the Inspector Significant Management Decisions With Which OIG
General disagrees Disagrees
405(b)(13) Information described under section 05(b) of the Federal Financial Management Improvement Act
Federal Financial Management Improvement Act of
1996
405(b)(14)– Peer review results External Peer Reviews
(16)
405(b)(17)-(18) Investigative statistical tables and supporting Investigations Reporting Statistics
metrics
405(b)(19) Investigations involving a senior government Investigations Involving a Senior Government
employee where allegations of misconduct were Employee Where Misconduct Was Substantiated
substantiated
405(b)(20) Whistleblower retaliation Whistleblower Retaliation Cases
405(b)(21) Attempts to interfere with the independence of Instances of Interference
OIG
405(b)(22) Each closed inspection, evaluation, and audit not Investigations Involving a Senior Government
disclosed to the public; each closed investigation Employee That Is Closed and Not Disclosed to the
involving a senior government employee not Public
disclosed to the public
Spring 2025 Semiannual Report to Congress | 62
U.S. Small Business Administration | Office of Inspector General
Make a Difference
To promote integrity, economy, and efficiency, we encourage you to report instances of fraud,
waste, or mismanagement to the OIG Hotline.*
Visit our OIG Hotline website.
Write or visit:
U.S. Small Business Administration
Office of Inspector General
Investigations Division
409 Third Street, SW (5th Floor)
Washington, DC 20416
* In accordance with Sections 407(b) and 420 (b)(2)(B) of the Inspector General Act of 1978, confidentiality of a complainant’s personally identifying
information is mandatory, absent express consent by the complainant authorizing the release of such information.
63 | Spring 2025 Semiannual Report to Congress
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