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January 14, 2022 Micha el Bresnick
T 202.344.4583
F 202.344.8300
mjbresnick@Venable.com
The Honorable James E. Clyburn
Chairman
Select Subcommittee on the Coronavirus Crisis
2157 Rayburn House Office Building
Washington, DC 20515-6143
Re: Letter of November 22, 2021, to Womply, Inc.
Dear Mr. Chairman:
We write in response to your November 22, 2021, letter to Mr. Toby Scammell, Chief
Executive Officer of Womply, Inc (“Womply”). As we have shared during meetings with staff for
the Select Subcommittee on the Coronavirus Crisis (“Subcommittee”), Womply is cooperating
with the Subcommittee’s investigation and shares its concern over waste, fraud, and abuse in the
Paycheck Protection Program (“PPP”). To that end, we are providing background on Womply, an
overview of its role in the PPP, and initial responses to the Subcommittee’s requests for
information. Womply will submit additional responsive information and documents on a rolling
basis.
Overview of Womply’s Role in the PPP
Founded in 2011, Womply’s mission and core business is to help small businesses thrive
in a digital world. It began as a commerce platform for small businesses, providing marketing and
financial tools to facilitate reputation management, email marketing, business intelligence, and
dynamic customer directories. Through these services Womply initially supported over 500,000
American small businesses and their customers.
In 2020, as the COVID-19 pandemic shut down the U.S. economy, Womply expanded its
services to assist small businesses further. Specifically, its extensive experience connecting small
businesses and customers was in great demand after the federal government created the Paycheck
Protection Program (“PPP” or “the Program”) in the Coronavirus Aid, Relief, and Economic
Security Act (the “CARES Act”), Pub. L. No. 116-136, during the early months of the pandemic.
Upon passage of the CARES Act, government officials implored financial institutions and others
CONFIDENTIAL
January 14, 2022
Page 2
to make sure businesses in need received funds as fast as possible to prevent an economic
catastrophe. 1
Given its local commerce platform and expertise related to small businesses and
underserved communities, Womply quickly answered the call. First, in 2020, Womply created a
website through which potential borrowers could apply for PPP loans. Womply referred applicants
applying through its website to Womply’s lender partners, and the lenders were responsible not
only for deciding whether to fund the loans, but also for all other tasks associated with processing,
managing, and tracking the PPP loans, including verifying borrower identity and auditing borrower
information.
Many lenders that participated in the PPP, however, did not have experience in funding
and managing a large volume of modest loans for small businesses. They also had limited
technological capabilities and personnel to handle the workload associated with the significant
volume of PPP loans. Conversely, some lenders, including many of the largest banks in the
country, focused their PPP lending on wealthier, existing customers, as was noted by the SBA’s
Office of Inspector General (SBA-OIG).2 This left millions of eligible small businesses, as well as
many minority owned businesses, without access to PPP loans.
In order to ensure that even more eligible small businesses had access to PPP loans, in
February 2021, Womply released a technology platform that made it substantially easier and more
cost-effective for lenders to process, manage, and track their PPP loans, particularly the smaller
PPP loans to the smallest businesses (the “Technology Platform”). The Technology Platform
provided lenders with similar PPP loan application collection and ref erral services that Womply
1
See e.g., U.S. Secretary of the Treasury Steven T. Mnuchin and Small Business Administration
Administrator Jovita Carranza, Joint Statement on the Resumption of the Paycheck Protection Program (Apr. 24,
2020) (available at https://home.treasury.gov/news/press-releases/sm988) (“We encourage all approved lenders to
process loan applications previously submitted by eligible borrowers and disburse funds expeditiously.”); Speaker of
the U.S. House of Representatives Nancy Pelosi, Floor Statement (March 27, 2020) (available at
https://www.congress.gov/congressional-record/2020/03/27/house-section/article/H1732-1) (“Thanks to Secretary
Mnuchin, he is facilitating this by not just all of the loans going through the SBA, but going through banks with the
SBA imprimatur, which makes this all go much faster.”); Small Business Administration, Paycheck Protection
Program Interim Final Rule (available at https://www.sba.gov/sites/default/files/2020-04/PPP--
IFRN%20FINAL.pdf) (“The intent of the Act is that SBA provide relief to America’s small businesses
expeditiously. This intent, along with the dramatic decrease in economic activity nationwide, provides good cause
for SBA to dispense with the 30-day delayed effective date provided in the Administrative Procedure Act.”).
SBA Office of Inspector General, “Inspection of SBA’s Implementation of the Paycheck Protection
2
Program,” Report 21-07 (Jan. 14, 2021), available at https://www.sba.gov/sites/default/files/2021-
01/SBA%20OIG%20Report-21-07.pdf.
January 14, 2022
Page 3
provided before, but through a more comprehensive and borrower-facing internet portal called
“PPP Fast Lane.”
The Technology Platform also provided a new lender-facing portal with numerous
integrated technology services, which Womply developed in conjunction with Teslar Software
(“Teslar”) and other third parties (the “Teslar Portal”). Those technology services helped lenders
collect, verify, and understand the documentation and information provided by applicants. The
services included, among other things, multi-lingual translations, bank data collection and analysis,
tax document collection and analysis, identity verification, bank account analysis, borrower status
updates, borrower support, bank account and deposit management, cyber security protection, and
logging, reporting, and capacity management tools. The Technology Platform also allowed lenders
to review, manage, and submit PPP loan applications to the SBA, track the status of the
applications, resubmit applications if necessary, fund PPP loans, and track all funding activities.
These services were similar to the types of services that the lenders would have retained
independently if they had not contracted to receive Womply’s suite of services. Womply’s
Technology Platform integrated these third-party tools into a larger suite of services designed to
assist the lenders through a single technology platform.
Although Womply provided a suite of technology services to help lenders receive and
manage PPP loan applications, Womply did not engage in lending and was not subject to the Bank
Secrecy Act or any of its anti-money laundering (“AML”) program requirements. In addition,
Womply was not a Lender Service Provider subject to SBA regulations. Womply also did not (and
had no legal or contractual responsibility to) (i) underwrite or approve PPP loan applications; (ii)
submit PPP applications to the SBA; (iii) fund PPP loans approved by the SBA; (iv) disburse PPP
loan proceeds to borrowers; or (v) service PPP loans. Each of these functions remained the
responsibility of the lenders pursuant to applicable law, the lenders’ agreements with Womply,
and the lenders’ agreements with the SBA.
Throughout the PPP, Womply worked diligently to refine and improve its Technology
Platform. It also frequently contacted lenders and other financial institutions, officials from the
SBA and SBA-OIG, and others in government to identify and stop suspected fraud in the PPP.
Womply made these efforts on its own initiative and without any legal or regulatory obligation to
do so.
Implementing the Program’s objectives proved no small feat. The Program required
connecting millions of potential borrowers with thousands of lenders, which were required to
organize, review, and approve applications in compliance with the PPP’s criteria. The packages of
services offered by Womply was remarkably successful for the participating lenders; in total,
Womply assisted approximately two million small businesses in applying for PPP loans.
January 14, 2022
Page 4
Womply’s importance to the PPP and to small businesses was recognized by Bill Briggs, the
Acting Associate Administrator for the Office of Capital Access at the U.S. Small Business
Administration, when he stated during a joint conference with Womply’s CEO on January 19,
2021: “I do want to thank Womply for their partnership in all of this and everything that they have
done to help all small businesses.” 3
With this background in mind, we provide responses to the Subcommittee’s requests
below. As noted above, Womply is eager to cooperate with the Subcommittee’s investigation into
potential waste, fraud, and abuse in the PPP and is equally concerned about ide ntifying such
programmatic weaknesses. We request that you treat the information submitted as confidential and
provide Womply with notification and an opportunity to object before any confidential information
is released publicly. Womply is voluntarily submitting confidential business information and trade
secrets to the Subcommittee for the purposes of its investigation, but we request that the
Subcommittee not share this information publicly, as the disclosure of confidential business
information and/or trade secrets could harm the company.
Initial Response to Requests for Information
1. How much is Womply’s total revenue from facilitating PPP loans to date?
Womply earned fees related to the PPP both by referring applicants to PPP lenders and by
offering technological services to these lenders to allow them to review, manage, approve, submit
and track PPP applications and loans. Those fees are broken down as follows:
2020 2021
PPP Referral Revenue $2,934,899 $190,530,753
PPP API Revenue n/a $232,923,793
PPP Technology Platform Revenue n/a $1,668,819,784
Total $2,934,899 $2,092,274,331
2. How many PPP loan applications and loans have been approved, issued, or otherwise
facilitated by Womply, broken down by week, from April 1, 2020 to May 27, 2021?
Womply did not approve PPP loan applications, issue PPP loans, or otherwise serve as a
lender in the PPP. Womply helped connect borrowers with PPP lenders, which were responsible
3
Bill Briggs, Acting Associate Administrator, Office of Capital Access at the U.S. Small Business
Administration, FAQs with the SBA for Contract Workers (Jan 19, 2021) (available at
https://www.youtube.com/watch?app=desktop&v=mt8VQXSNCIE) (see remarks at 25:05).
January 14, 2022
Page 5
for reviewing, approving, submitting, funding, and servicing the PPP applications and loans. Since
the PPP’s inception, Womply referred 128,813 applicants to lenders in 2020, and 2,584,420
applicants to lenders in 2021.
3. How many PPP loan applications have been denied or rejected by Womply, broken
down by week, from April 1, 2020 to May 27, 2021, and what was the reason for each
denial or rejection?
Womply is not a lender and did not approve, deny, or reject PPP loan applications. In
connection with the Technology Platform launched in 2021, Womply provided services to lenders
for their review of PPP loan applications, including integrated Know Your Customer (“KYC”)
information verification and management services; bank data and tax data analysis and validation;
and other services. Womply did not refer applicants to PPP lenders pursuant to the technology
services for the following reasons:
• Approximately 453,931 for failing the KYC information verification process.
• Approximately 342,511 for failing tax document review.
• Approximately 367,539 for failing some other reason.
Note that there is overlap among the reasons for not referring applicants to PPP lenders. Applicants
not referred to PPP lenders could fail for more than one reason.
5. Please provide a list of all fraud checks conducted by Womply on PPP loan
applications, including indicators used by automatic systems to detect fraud, a
description of how each check serves to detect and prevent fraud, and the average time
taken to approve or reject a PPP loan application, broken down by week.
Through the Technology Platform, Womply provided services to lenders that helped them
review and approve PPP loan applications. Womply, however, is not subject to the BSA’s AML
program obligations, and the lenders retained responsibility for compliance with any legal
requirements related to fraud. The technology services, including the Teslar Portal, helped lenders
review and approve the applications, and included features that were designed to help the lenders
verify the identity of applicants and check for certain indicia of potential fraud.
The technology services included:
• Integrated Know Your Customer (“KYC”) information verification and management
services, including verification of an applicant’s personal identification information against
authoritative databases, pictured identification fraud detection and verification of
January 14, 2022
Page 6
additional government identification, biometric scan verification, and manual verification
of information where appropriate;
• Bank data and tax data analysis and validation to validate bank data automatically, OCR
data extraction from manually uploaded documents, in-business verification based on bank
transaction history, and manual checks to ensure data accuracy where appropriate; and
• Reports to lenders regarding KYC information, funding instructions, loan eligibility
reports, and tax data reports.
These KYC and fraud-related services were provided using various third-party solutions that were
incorporated into the Technology Platform. In this regard, as noted, Womply aggregated various
third-party services into a single technology platform that allowed lenders to review, manage, and
submit PPP loan applications to the SBA, track the status of the applications, resubmit app lications
if necessary, fund PPP loans, and track all funding activities. Examples of the aggregated third -
party services Womply provided include: Teslar, DocuSign, LexisNexis, Plaid, Persona, Mindee,
Inscribe, Twilio, Flashpoint, Guideline, Kickbox, FreshAddress, and Ocrolus.
7. Please provide a description of what indicators and information Womply’s automated
systems use to detect fraud or money laundering and how many and what percentage of
applications were rejected through this system; please also describe what indicators
trigger these automated systems to escalate an application for human review and what
percentage of those escalations resulted in rejected applications.
In connection with the Technology Platform, Womply provided technology services to
lenders to help them review and approve PPP loan applications, as described in greater detail in
response to Request #5. These services included integrated KYC information verification and
management services; bank data and tax data analysis and validation; and other services. In 2021,
applicants were not referred to PPP lenders for the following reasons:
• Approximately 453,931 for failing KYC;.
• Approximately 342,511 for failing tax document review; and
• Approximately 367,539 for failing some other reason.
Note that there is overlap among the reasons for not referring applicants to PPP lenders. Applicants
not referred to PPP lenders could fail more than one reason.
January 14, 2022
Page 8
DreamSpring Yes Yes
FC Marketplace, LLC Yes No
Fountainhead SBF LLC Yes Yes
Fundbox, Inc. Yes No
Harvest Small Business Finance, LLC Yes Yes
Kabbage, Inc. Yes No
Lendio, Inc. Yes No
On Deck Capital, Inc. Yes No
Sunshine State Economic Development
Corporation Yes Yes
TMC Financing Yes Yes
10. Please provide a detailed description of any incentives or rewards that Womply
offered or provided to employees or contractors processing PPP loan applications,
including non-monetary rewards.
Womply did not provide any incentives or rewards to its employees or contractors for
processing PPP loan applications. Womply provided bonuses of approximately $20,000 to
employees following the conclusion of the PPP. These bonuses were not tied to any metrics.
11. What were the total budgets for, and amounts allocated to, AML, BSA, and fraud
compliance at Womply, on a per quarter basis, in 2019, 2020, and 2021?
As a technology services provider, Womply is not subject to the BSA’s AML program
requirements. Instead, in 2021, Womply provided various technology services to lenders to assist
them with carrying out their AML and PPP obligations. The technology services provided to
lenders included the aggregation of various third-party solutions, all of which were designed to
help lenders receive, review, and approve PPP applications (including certain AML-related
functions, such as identity verif ication, bank verification, etc.). Examples of Womply’s
investments in some of those services, is provided below:
2020 2021
787 Seventh Avenue
New York, NY 10019-6099
Tel: 212 728 8000
Fax: 212 728 8111
April 14, 2022
VIA EMAIL CONFIDENTIAL TREATMENT REQUESTED
The Honorable James E. Clyburn
Chairman
Select Subcommittee on the Coronavirus Crisis
2157 Rayburn House Office Building
Washington, D.C. 20515-6143
Re: Oto Analytics, Inc. d/b/a Womply Select Subcommittee on the Coronavirus Crisis
Investigation
Dear Mr. Chairman:
On behalf of Oto Analytics, Inc., d/b/a Womply (“Womply” or the “Company”), we write in response
to the letter from the United States House of Representatives Subcommittee on the Coronavirus Crisis
(the “Committee”), dated November 22, 2021, requesting certain documents and information regarding
the Paycheck Protection Program, as modified by subsequent conversations and correspondence with
Womply’s counsel. Womply is cooperating with the Committee’s investigation, and we are working
diligently to respond to or address the Committee’s requests in a timely manner.
As previewed during our conversation with the Committee on April 13, 2022, enclosed are written
responses to Information Requests Nos. 4, 8, and 9, as well as follow-up requests related to Information
Requests Nos. 1, 2, 5, 7, and 8.
Also, as previewed, we are producing documents bearing Bates Nos. House_Select_000006048 –
House_Select_000012774. Bates numbers House_Select_000006048 – House_Select_000009278 are
communications with the SBA responsive to Document Request No. 3 and certain follow-up requests.
Bates numbers House_Select_000009279, House_Select_000009423 – House_Select_000009425, and
House_Select_000010020 – House_Select_000010080 are documents concerning Womply’s Know
Your Customer process and/or anti-fraud measures responsive to Document Request Nos. 2 and 4 and
certain follow-up requests. Bates numbers House_Select_000010017 – House_Select_000010019,
House_Select_000009286 – House_Select_000009422, House_Select_000009426 –
House_Select_0000040, and House_Select_000009474 – House_Select_000009482 are documents
B RUSSELS C HICAGO F RANKFURT H OUSTON L ONDON L OS A NGELES M ILAN
N EW Y ORK P ALO A LTO P ARIS R OME S AN F RANCISCO W ASHINGTON
The Honorable James E. Clyburn
April 14, 2022
Page 2
concerning Womply’s processes for routing loan applications responsive to Document Request No. 1.
Bates numbers House_Select_000009283 – House_Select_000009285, House_Select_000010081 –
House_Select_00001616, and House_Select_00011617 – House_Select_000011629 are screenshots of
the “Frequently Asked Questions about the Paycheck Protection Program (PPP)” section of the Womply
website and other information available to loan applicants responsive to Document Request No. 1.
Finally, Bates numbers Bates numbers House_Select_000009280 – House_Select_000009282,
House_Select_000009441 – House_Select_000009473, House_Select_000009483 –
House_Select_000010026, and House_Select_000011630 – House_Select_000012774 are documents
reflecting Womply’s marking efforts responsive to Information Request 9 and certain follow-up
requests.
By producing these responses, documents, and letter, Womply does not intend to waive, and expressly
reserves, its rights and privileges under all applicable laws and regulations. Furthermore, by producing
these responses, documents, and letter, Womply does not waive attorney-client privilege or work-
product protection for any documents or communications produced, or any related documents or
communications. To the extent any documents produced contain information subject to attorney-client
privilege or work-product protection, such disclosure is inadvertent. Womply reserves the right to claw
back any such inadvertently produced documents.
Womply is voluntarily submitting confidential business information and trade secrets to the Committee
for purposes of its investigation and requests that the Committee not share this information publicly, as
the disclosure of confidential business information and/or trade secrets could harm the Company.
Womply therefore requests that the Committee accord this letter, the responses, and any associated
produced documents with confidential treatment. In the event the Committee decides to release any of
the information provided or produced by Womply to the public, Womply requests reasonable advance
notice and an opportunity to object to any such release.
I am available at (212) 728-8166 if you have any questions.
Sincerely
/s/ Zeh S. Ekono
Zeh S. Ekono
(Enclosure)
cc: Molly Claflin
Brandon White
Laura O’Neill
Alexander L. Cheney
Randal Jackson
Erik Jones
Confidential Treatment Requested
CONFIDENTIAL TREATMENT REQUESTED
OTO ANALYTICS, INC. D/B/A WOMPLY
Response to Certain Requests for Information in the
House Select Subcommittee on the Coronavirus Crisis’
Document and Information Request Letter dated November 22, 2021 and
Follow-Up Requests dated January 31, 2022 and April 8, 2022.
April 14, 2022
CONFIDENTIAL TREATMENT REQUESTED
INTRODUCTION
Set forth below is the response (the “Response”) of Oto Analytics, Inc. d/b/a Womply
(“Womply”) to certain information requests (the “Requests”) reflected in a letter from Chairman
James Clyburn of the House Select Committee on the Coronavirus Crisis (the “Committee”), dated
November 22, 2021, and emails from Brandon White, counsel to the Committee, from January 31,
2022 and April 8, 2022, in connection with an ongoing investigation by the Committee. More
specifically, these Responses are provided to Information Requests Nos. 4, 8, and 9, as well as
follow-up requests related to Information Requests Nos. 1, 2, 5, 7, and 8. These Responses
supplement any documents and/or responses previously provided or produced to the Committee
by Womply.
Womply provides its Response based upon information currently available to Womply in
its books and records and from those employees who Womply believes to have knowledge relevant
to the requests. Womply has used reasonable efforts to provide all information to the extent such
information was available and could be timely gathered. To the extent Womply has been unable
to provide information responsive to a Request, or to the extent that the Committee asserts that any
response to any Request is incomplete, Womply responds that it has undertaken reasonable efforts
to discover and compile such information and otherwise respond to these Requests by the response
deadline. Womply reserves the right to supplement its Response.
By its Response, Womply does not intend to waive, and expressly reserves, its rights under
all applicable laws and regulations. This Response contains information that Womply considers
to be confidential and proprietary business information. Therefore, Womply requests that the
Committee accord this Response and any associated produced documents with confidential
treatment. In the event the Committee decides to release any of the information publicly, Womply
requests reasonable advance notice and an opportunity to object to any release. Womply is
voluntarily submitting confidential business information and trade secrets to the Committee for
purposes of its investigation, but requests that the Committee not share this information publicly,
as the disclosure of confidential business information and/or trade secrets could harm the company.
-1-
CONFIDENTIAL TREATMENT REQUESTED
Non-Fast Lane Program: Starting in April 2020, Womply’s Non-Fast Lane Program
matched Loan Applicants with potential Lenders. Loan Applicants entered basic contact and
business information (“Basic Applicant Information”) into a borrower-facing website and then,
based on certain algorithms, the website forwarded the Loan Applicants to the website of a
particular Non-Fast Lane Partner. Loan Applicants did not pay Womply for these referral services.
In connection with its referral services for Loan Applicants, Womply offered referral services to
Non-Fast Lane Partners with an existing contractual relationship. Womply referred Loan
Applicants to Non-Fast Lane Partners based on the Non-Fast Lane Partners’ instructions regarding
the types of loans they would be willing and able to accept. Non-Fast Lane Partners agreed to
compensate Womply for these referral services at contractually agreed-upon rates in accordance
with the relevant agreement(s).
Fast-Lane Program: Starting in February 2021, Womply offered a borrower-facing
website called Fast Lane (the “Fast Lane Dashboard”). The Fast Lane Dashboard allowed a Loan
Applicant to enter all information and upload all documents required to populate the application
for a PPP loan (“Applicant Entries”). After a Loan Applicant submitted its Applicant Entries and
Womply completed certain processes described below, Womply referred the Loan Applicant to a
particular Fast Lane Partner using a routing process that considered many different factors. A
Loan Applicant continued to have access to the Fast Lane Dashboard after submitting its Applicant
Entries, which allowed the Loan Applicant to, among other things, monitor the status of its Loan
Application and securely provide additional information to the Lender. Loan Applicants did not
pay Womply for these referral services and technology services.
Womply also offered both referral services and technology services to Fast Lane Partners with an
existing contractual relationship. Womply referred Loan Applicants to Fast Lane Partners.
Among other technology services, Womply also provided Fast Lane Partners with access to a
Lender-facing portal that Womply developed in conjunction with Teslar Software and other third
parties (the “Teslar Portal”). The Teslar Portal allowed Fast Lane Partners to review, approve,
service, and otherwise manage Loan Applications and PPP loans. For example, through the Teslar
Portal, a Fast Lane Partner could, among other things, (i) access Applicant Entries to determine
whether a Loan Applicant qualified for a PPP loan, (ii) process the Loan Applicant’s Loan
Application and submit it to the SBA for approval, (iii) manage and track the Loan Application
while being processed by the Lender and/or the SBA, and (iv) manage and track funding activities
for the PPP loan.
Womply also provided Fast Lane Partners with integrated technology services offered by various
third-party solutions. These services allowed Fast Lane Partners to access helpful features such as
fraudulent document detection (Inscribe), data collection analysis (Ocrolus), tax document
classification (Mindee), best-in-class Know Your Customer (“KYC”) verification (Persona), bank
account verification (Plaid), and the creation and transmission of electronic promissory notes
(DocuSign), and phone number verification (Twilio). Lenders were responsible for underwriting
and determining whether Loan Applicants qualified for PPP loans. Fast Lane Partners agreed to
compensate Womply for these referral services and technology services at contractually agreed-
upon rates in accordance with the relevant agreement(s).
-4-
CONFIDENTIAL TREATMENT REQUESTED
FOLLOW UP TO INFORMATION REQUEST NOS. 5 AND 7:
To complete your response to Information Request Nos. 5 and 7, please provide additional
details regarding the fraud checks, how they operated, what steps were entailed, and what
indicia they were designed to detect, for all checks that were performed by Womply or
facilitated through Womply’s Technology Platform of aggregated third-party services.
Please also respond to the portion of our request regarding “what indicators trigger these
automated systems to escalate an application for human review and what percentage of
those escalations resulted in rejected applications.” Given that Womply did not “approve
or reject” loan applications directly, please provide the requested breakdown of “average
time taken” to determine whether or not to refer an applicant to a lender.
RESPONSE TO FOLLOW UP TO INFORMATION REQUEST NOS. 5 AND 7:
As discussed during our conversation with the Committee on April 13, 2022, Womply continues
to conduct a reasonable investigation into the issues referenced in the Follow Up to Information
Request Nos. 5 and 7, including the mechanics and other details regarding Womply’s KYC process
and anti-fraud measures. However, in the interest of full cooperation and timely compliance,
Womply provides a preliminary response providing an overview of its efforts based on our current
understanding.
Anti-Fraud Measures. Womply strongly encouraged Loan Applicants to report potential fraud.
Initially, Womply collected reports of potential fraud by advising Loan Applicants to e-mail
Womply at reportfraud@womply.com and/or fill out a fraud form on the “Contact Us” section of
Womply’s website. Womply intended to provide these reports to the SBA and retained an expert
to review and submit them. However, the SBA discouraged Womply from collecting these reports,
and thereafter Womply directed any person with knowledge of or complaints about potential fraud
to notify the SBA.
In addition, Womply implemented various proactive measures to combat fraud in connection with
PPP loans, including (but not limited to) the following:
Womply engaged the services of Flashpoint, an online threat intelligence vendor, to
provide Womply with alert emails and weekly reports on online information about how to
defraud Womply and the PPP program.
For Loan Applicants, Womply limited the number of submissions of Applicant Entries and
social security numbers that could be linked to a single bank account.
Womply voluntarily added enhanced fraud checks including public database checks,
government identification authentication, video selfies that matched identity to government
identification, and sanctions and watchlist report checks.
In many cases, Womply conducted a manual review of Loan Applications for Loan
Applicants who had already passed identity verification and received PPP funds to
determine if any Loan Applications contained fraudulent identity information. Womply in
- 10 -
CONFIDENTIAL TREATMENT REQUESTED
turn provided to the SBA lists of PPP loan recipients that Womply had determined were
likely fraudulent.
Womply also attempted to freeze and recover PPP funds disbursed to Loan Applicants.
Specifically, Womply contacted several financial institutions and provided them with
information regarding Loan Applicants suspected of fraud. As a result of Womply’s
coordination with certain financial institutions, Womply estimates that it facilitated the
return of approximately $6 million in fraudulently obtained loan proceeds.
When Womply became aware of potential fraud by Loan Applicants as part of the technology
services that it provided to assist Fast Lane Partners, Womply undertook efforts to prevent such
Loan Applicants from proceeding with the application process, including, when possible,
terminating the associated Loan Application(s). Womply also analyzed Loan Applicants and/or
Loan Applications to identify trends and patterns to block Loan Applicants and/or Loan
Applications that were likely fraudulent.
KYC Process. Below is an overview that reflects our current understanding of the KYC process
implemented by Womply for the Fast Lane Program.
Email Addresses Verification
Loan Applicants were prompted to enter basic information about themselves, including name,
address, email, and phone number.
Womply contracted with Kickbox, one of the leading providers of email verification and email
deliverability services, to verify the validity of the email addresses provided by Loan Applicants.
The Kickbox service prevented Loan Applicants that entered mistyped or invalid email addresses
from creating an account in the Fast Lane Dashboard.
Womply also contracted with SendGrid, another third-party vendor, to send verification codes to
Loan Applicants’ email addresses to validate those email addresses. This service, like Kickbox,
prevented spam and other fake email addresses from being linked to an account in the Fast Lane
Dashboard.
Phone Number Verification
Womply contracted with a Twilio, a leading provider of tools that assist companies in making,
receiving, and verifying phone and other types of communications, to verify the phone numbers
provided by Loan Applicants. Twilio’s service also screened out Voice over Internet Protocol
numbers because they are not able to receive text messages.
IP Address Filtering
Womply initially blocked IP addresses from certain countries from accessing Womply’s website.
Womply later expanded its efforts to block anonymous and non-U.S. IP addresses, as well as
anyone using proxies, VPNs, or Tor, from accessing Womply’s website.
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CONFIDENTIAL TREATMENT REQUESTED
Identity Verification
Womply used various third-party tools and services and in-house solutions to verify the identity
of Loan Applicants. These identity verification solutions were applied at different stages of the
application process and evolved over time.
o Plaid Identity
For a short time period, and with the consent of Loan Applicants, Womply used Plaid to verify the
identities of Loan Applicants. Loan Applicants were asked to connect their bank accounts via
Plaid during the process of entering their Applicant Entries, and, once completed, Plaid provided
Womply with certain information regarding the connected bank account(s) (e.g., an
accountholder’s name, address, email address, and phone number). Womply then compared the
data provided by Plaid to the Applicant Entries entered by the Loan Applicants.
o DocuSign ID Check
From approximately February 2021 to early April 2021, Womply used DocuSign ID Check (“ID
Check”) (powered by LexisNexis Risk Solutions (“LexisNexis”)) to verify the identities of Loan
Applicants. Later on, this tool was implemented intermittently as an added anti-fraud measure.
ID Check was a leading knowledge based answers solution that had been frequently relied upon
by SBA lenders for identity verification in the past. ID Check required Loan Applicants to answer
a series of knowledge based personal questions based on LexisNexis data sources before Loan
Applicants could access a DocuSign envelope to sign Loan Applications and/or Promissory Notes.
o Persona
Starting in early April 2021, Womply began using Persona, a leading identity-verification solution,
as a more robust alternative to Plaid Identity and DocuSign ID Check. Loan Applicants, including
those who had already been referred to Lenders, were required to complete the Persona verification
process.
Persona completed an “inquiry” for each Loan Applicant that had submitted its Applicant Entries.
Each inquiry had three components: database verification, selfie verification, and identification
verification.
1) The database verification checked at least the name, date of birth, and Social Security
number entered by the Loan Applicant against various databases, including sanctions lists
complied by the Office of Foreign Asset Control, other sanctions lists, and the American
Association of Motor Vehicle Administrators database.
2) The selfie verification required the Loan Applicant to take a “video selfie.” Persona
recorded a video, from which it captured three snapshots of the Loan Applicant moving its
face to the left and right and looking directly at the camera. Persona compared these selfies
to the photo on the government identification provided by the Loan Applicant.
3) The identification verification required the Loan Applicant to upload the front and back
images of the Loan Applicant’s government identification. Persona compared the
- 12 -
CONFIDENTIAL TREATMENT REQUESTED
information on the Loan Applicant’s government identification to certain information
entered by the Loan Applicant. Persona also determined whether the image on the
government identification had been tampered with and whether the address listed was
valid.
Womply also implemented additional verification measures after Womply discovered that some
Loan Applicants had been submitting selfie videos of dolls and mannequins that Persona’s
algorithms were not catching. Womply directed Persona to implement additional checks using the
government identification uploaded by the Loan Applicants and to run retrospective checks on
Loan Applicants that had previously passed the Persona inquiry. Womply also undertook efforts
to confirm that the selfies submitted by Loan Applicants depicted humans.
Bank Accounts and/or Bank Statements Verification
Womply used various third-party tools and services, and in-house solutions, to verify the bank
accounts provided by Loan Applicants. For Loan Applicants that connected a bank account via
Plaid, Womply used Plaid to extract a two-year transaction history that was used to confirm that
the Loan Applicant was in business in February 2020. Any Loan Applicant that could not or did
not want to connect to their bank account via Plaid could manually upload a bank statement, a
voided check (or, later, a direct deposit form), and a government identification and enter their
account and routing numbers.
Authenticity and Accuracy Verification of Documents Submitted by Users
Loan Applicants were required to upload certain tax documents (e.g., a 1040 including the
Schedule C and/or Schedule F) as part of the application process. Womply used multiple vendors
to classify those documents and analyze them for fraud (e.g., Mindee, Ocrolus, and Inscribe).
Womply also performed several automated checks of the tax documents (e.g., comparing the name
and social security number reflected in the tax documents to the same information entered by the
Loan Applicant, comparing the loan amount calculated from the data extracted from the tax
documents to the amount entered by the Loan Applicant, etc.).
- 13 -
CONFIDENTIAL TREATMENT REQUESTED
FOLLOW UP TO INFORMATION REQUEST NO. 8:
Please provide all contracts and agreements related to the relationships listed in your
response to Information Request No. 8, in addition to all aggregated third-party services
(including the examples referenced throughout your letter and any others) and any other
companies or persons that contracted or worked with Womply in connection with PPP
loans. The detailed description of each relationship with those entities should include,
among other relevant details, the services provided by or to Womply in connection with
each partnership, the fee or billing structure associated with the services, the duration of
the services, and any compensation that Womply received or is owed by these entities. To
the extent that any of Womply’s owners, executives, or family members of
owners/executives control, have ownership in, or are employed by any entity that has
contracted or provided services to Womply in connection with PPP loans, please identify
those persons and entities and provide details of those relationships.
RESPONSE TO FOLLOW UP TO INFORMATION REQUEST NO. 8:
Womply engaged the below third-party vendors to provide certain services in connection with its
PPP-Related Services (collectively, the “PPP Vendors”).4 We are diligently working to collect
information regarding the amounts paid by Womply to the PPP Vendors and anticipate providing
that information soon. Also we continue to conduct a reasonable investigation into (i) whether
any PPP Vendor provided services to Womply unrelated to PPP and, if so, whether information
that disaggregates the amounts for services related to PPP is readily available and (ii) whether
“Womply’s owners, executives, or family members of owners/executives control, have ownership
in, or are employed by” any PPP Vendor.
Also, as discussed during our conversation with the Committee on April 13, 2022, we anticipate
that Womply’s agreements with many PPP Vendors contain confidentiality provisions that will
prevent the disclosure of certain agreements and/or certain terms referenced in the Follow Up to
Information Request No. 8. We intend to work through these issues in the coming weeks and are
also willing to find alternatives for providing helpful information to the Committee. Also we
appreciate the Committee’s offer to identify which vendors should be treated as priorities.
4
The below list reflects our current understanding of the PPP Vendors but does not include individuals who were
directly engaged as independent contractors (i.e., not engaged through an agency). We continue to investigate this
issue and will amend this list as needed.
- 16 -
CONFIDENTIAL TREATMENT REQUESTED
Philo, Redbox, HGTV, CBS News, YouTube TV and Video Pre-roll, Spotify, Audacy,
Spreaker, Bloomberg Radio, Hot 97, Zeno, Stitcher, NPR, and the VOX podcast
Website and app banners and advertisements, including through Bing, Discovery
(Google’s tool that places ads in Gmail, YouTube, and the Google ad network), LinkedIn,
Reddit, Pinterest, Twitch, Yelp, MSN, Forbes, Zillow, CNN, CNet, Amazon Display,
Waze, NPR, and NY Times
E-mail Outreach
Affiliate Program (a program that offered participants the opportunity to earn a commission
for referring friends, family, and others to the Fast Lane Program subject to certain terms
and conditions)
Referral Program (a program that offered the opportunity for companies and individuals
capable of generating a large volume of referrals to earn a commission for referrals to the
Non-Fast Lane Program or the Fast Lane Program subject to certain terms and conditions)
- 22 -
787 Seventh Avenue
New York, NY 10019-6099
Tel: 212 728 8000
Fax: 212 728 8111
May 20, 2022
VIA EMAIL CONFIDENTIAL TREATMENT REQUESTED
Hon. James E. Clyburn
Chairman
United States House of Representatives
Select Subcommittee on the Coronavirus Crisis
2157 Rayburn House Office Building
Washington, D.C. 20515-6143
Re: Oto Analytics, Inc. d/b/a Womply Select Subcommittee on the Coronavirus Crisis
Investigation
Dear Mr. Chairman:
On behalf of Oto Analytics, Inc., d/b/a Womply (“Womply” or the “Company”), we write in response
to the letter from the United States House of Representatives Subcommittee on the Coronavirus Crisis
(the “Committee”), dated November 22, 2021, requesting certain documents and information regarding
the Paycheck Protection Program (“PPP”), as modified by subsequent conversations and correspondence
with Womply’s counsel.
Please find enclosed written responses to Information Requests 8, 10, 12, and 13. By producing these
responses, Womply does not intend to waive, and expressly reserves, its rights and privileges under all
applicable laws and regulations. Womply is voluntarily submitting confidential business information
and trade secrets to the Committee for purposes of its investigation and requests that the Committee not
share this information publicly, as the disclosure of confidential business information and/or trade secrets
could harm the Company. Womply therefore requests that the Committee accord this letter and the
responses with confidential treatment. In the event the Committee decides to release any of the
information provided by Womply to the public, Womply requests reasonable advance notice and an
opportunity to object to any such release.
Womply intends to cooperate with the Committee’s investigation and will continue to diligently respond
to or address the Committee’s requests. I am available at (212) 728-8166 if you have any questions.
B RUSSELS C HICAGO F RANKFURT H OUSTON L ONDON L OS A NGELES M ILAN
N EW Y ORK P ALO A LTO P ARIS R OME S AN F RANCISCO W ASHINGTON
Hon. James E. Clyburn
May 20, 2022
Page 2
Sincerely
/s/ Zeh S. Ekono
Zeh S. Ekono
(Enclosure)
cc: Molly Claflin
Brandon White
Laura O’Neill
Derek Collins
Alexander L. Cheney
Randall Jackson
Erik Jones
Confidential Treatment Requested
CONFIDENTIAL TREATMENT REQUESTED
OTO ANALYTICS, INC. D/B/A WOMPLY
Response to Certain Requests for Information in the
House Select Subcommittee on the Coronavirus Crisis’
Document and Information Request Letter dated November 22, 2021
May 20, 2022
CONFIDENTIAL TREATMENT REQUESTED
INTRODUCTION1
Set forth below is the response (the “Response”) of Oto Analytics, Inc. d/b/a Womply
(“Womply”) to certain information requests (the “Requests”) reflected in a letter from Chairman
James Clyburn of the House Select Committee on the Coronavirus Crisis (the “Committee”), dated
November 22, 2021, and emails from Brandon White, counsel to the Committee, from January 31,
2022 and April 8, 2022, in connection with an ongoing investigation by the Committee. More
specifically, these Responses are provided to Information Request Nos. 8, 10, 12 and 13. These
Responses supplement any documents and/or responses previously provided or produced to the
Committee by Womply.
Womply provides its Response based upon information currently available to Womply in
its books and records and from those employees who Womply believes to have knowledge relevant
to the requests. Womply has used reasonable efforts to provide all information to the extent such
information was available and could be timely gathered. To the extent Womply has been unable
to provide information responsive to a Request, or to the extent that the Committee asserts that any
response to any Request is incomplete, Womply responds that it has undertaken reasonable efforts
to discover and compile such information and otherwise respond to these Requests by the response
deadline. Womply reserves the right to supplement its Response.
By its Response, Womply does not intend to waive, and expressly reserves, its rights under
all applicable laws and regulations. This Response contains information that Womply considers
to be confidential and proprietary business information. Therefore, Womply requests that the
Committee accord this Response and any associated produced documents with confidential
treatment. In the event the Committee decides to release any of the information publicly, Womply
requests reasonable advance notice and an opportunity to object to any release. Womply is
voluntarily submitting confidential business information and trade secrets to the Committee for
purposes of its investigation, but requests that the Committee not share this information publicly,
as the disclosure of confidential business information and/or trade secrets could harm the company.
1
Capitalized terms in this Response that are not defined herein retain the definition provided in
Womply’s April 14, 2022 and April 29, 2022 Responses.
-1-
CONFIDENTIAL TREATMENT REQUESTED
bonus varied by employee, though the average bonus was approximately $8,000. Also
certain employees received more than one bonus during the aforementioned time period.
In total, Womply paid this bonus, which totaled $354,651.26, to 29 current employees.
Retention Bonus. In March 2021, Womply awarded a retention bonus of $3,000 to one
current employee in a role integral to Womply’s PPP-Related Services.
Womply also awarded other incentives to certain current employees based on their employment
during the time period of April 1, 2020 through December 31, 2021. Womply typically awarded
these incentives at its discretion in the normal course of business (including prior to Womply’s
role in the PPP). As explained in detail below, none of these incentives were awarded solely
because of Womply’s PPP-Related Services, and most preceded or were not related to Womply’s
Fast Lane Program.
2020 Annual Target Bonus. In early 2021, in connection with the 2020 annual review
process, 47 current employees received an annual bonus. The amount of the bonus varied
by employee. The decision to award a bonus, along with the amount of the bonus, was
determined through a review process that took into consideration various factors, including
the Company’s performance and each employee’s performance. This bonus, which totaled
$654,277, was paid to most employees on February 15, 2021.
Stock Options. In August 2020 and September 2020, Womply awarded stock options to
employees on multiple occasions, and certain employees received multiple stock option
awards. In total, Womply awarded stock options to 60 employees for a total of 2,764,474
shares, with an average stock option award of approximately 30,716 shares. Also, in July
2020, Womply awarded one employee stock options for 4,000 shares as part of a refresh
of that employee’s compensation.
In February 2021, in connection with the 2020 annual review process, Womply awarded
46 employees with stock options. Womply awarded stock options for a total of 648,250
shares, with an average stock option award of approximately 14,000 shares.
Merit Increase. In February 2021, in connection with the 2020 annual review process,
Womply increased the salary or hourly wages of 40 employees.4
COVID-19 Adjustments. In April 2020, as part of the economic fallout from the COVID-
19 pandemic, Womply decreased the salary or hourly wages of all employees. Womply
subsequently returned all employees to their pre-pandemic salary or hourly wages through
two incremental increases in June 2020 and September 2020.
2021 Annual Target Bonus. In February 2022, in connection with the 2021 annual review
process, 57 employees received an annual bonus. The amount of the bonus varied by
employee. The decision to award a bonus, along with the amount of the bonus, was
determined through a review process that took into consideration various factors, including
4
Womply also increased the hourly wage of one current employee in November 2020.
-4-
From: @willkie.com>
Sent: Wednesday, July 6, 2022 11:41 AM
To:
Subject: RE: Letters for Mr. Toby Scammell and Mr. Cory Capoccia, Womply, Inc.
We are providing the following information for the record, in response to your email.
At the outset, we must correct your incorrect assumption that our client is on “an extended foreign
vacation” and that it “should not prevent him from fully participating in our investigation.” Such
aspersions are unnecessary. You made a similar reference during our call related to having our client
“leave the beach.” We never suggested he was on vacation or that he was “at the beach.” These
are assumptions you made, which raises concerns about your objectivity and preconceived notions
toward Womply. This has been an ongoing concern based upon your conduct throughout this
Investigation.
The Select Subcommittee sent our client a letter on June 27, 2022, requesting an in-person
transcribed interview for July 11, 2022. Any court or other neutral observer would acknowledge that
two weeks gives little time for our client to prepare for a transcribed interview with the government,
especially with the July 4th holiday coming in between. During our call, we also shared that our
client would be unavailable on that date because he would be in Europe. From July 10 – July 20, he
is hosting an in-person summit – an event that has been planned for a year. He will be staying in
Europe beyond that time to continue working on a product launch that is scheduled for August and
to visit family. We did not share this level of detail during our initial call because we did not
anticipate that it would be necessary to defend his travel schedule, particularly given that there was
no effort to inquire as to his availability before setting the interview date, which is a courtesy
typically extended in these circumstances. Nevertheless, we share this additional information about
his travel so you can better understand why he is unavailable on the date you requested.
We have offered to answer any question the Select Subcommittee has in writing, and we continue to
make that offer. Additionally, we are more than willing to do informal briefings for the Select
Subcommittee, if the Select Subcommittee believes that would be helpful for it to better understand
waste, fraud, and abuse in the PPP. However, the Select Subcommittee has not provided us with an
explanation for why it would need a voluntary transcribed interview of our client. The Select
Subcommittee has been investigating issues related to fraud, waste, and abuse in the PPP for over a
year. Womply has been part of this Investigation since November 2021. Multiple other companies
have been part of this Investigation too. The fact that the Select Subcommittee believes it needs a
transcribed interview of one person for such an enormous, first-of-its-kind government program
suggests that the Select Subcommittee is targeting that individual. This perspective is compounded
by the fact that the Select Subcommittee has been unwilling to share the specific topics it seeks to
discuss during the transcribed interview. We again request that the Select Subcommittee provide a
list of its interview topics, or at least clarify what requests or categories of information the Select
Subcommittee still seeks from Womply.
Womply has voluntarily cooperated with the Select Subcommittee’s Investigation since receiving its
voluntary request for information in November 2021. Womply has produced approximately 4,700
documents over 6 productions. Womply has submitted written responses to approximately thirty
requests made in the original letter or in subsequent communications with the Select
Subcommittee. Womply even made a 3-hour presentation to the Select Subcommittee on May 4,
2022, that was attended by a former Womply employee integral to Womply’s PPP-Related Services
who was available for questions and answered the many questions posed to him by staff.
Womply seeks to continue its voluntary cooperation with the Select Subcommittee’s Investigation.
However, Womply’s voluntary cooperation is based upon our mutual understanding of the Select
Subcommittee’s objectives – if the Select Subcommittee is now investigating specific employees of
Womply, it should share its intentions. If it is not investigating specific employees, we believe the
most efficient path forward would be for the Select Subcommittee to share its questions in writing
related to Womply and fraud, waste, and abuse in the PPP, and we will work expeditiously with the
Select Committee to determine whether to proceed with written responses, an informal briefing, or
some combination of the two. The Select Subcommittee has never indicated that there is any
information that it has been unable to obtain via information requests, document requests, or
informal briefings. Nor has the Select Committee suggested that the purportedly new and yet-to-
be-disclosed requests cannot be answered using the same process that has worked well over the
past seven months. Womply has demonstrated repeatedly that it will provide the Select
Subcommittee with the information it needs, and we remain at a loss as to why the Select
Subcommittee is suddenly denying Womply the opportunity to do so.
We are happy to discuss the best path forward at your earliest convenience.
Sincerely,
Willkie Farr & Gallagher LLP
787 Seventh Avenue | New York, NY 10019-6099
willkie.com | vCard | www.willkie.com bio
111 Huntington Avenue
9th Floor
Boston, MA 02199-7613
Telephone: 617-239-0100
Fax: 617-227-4420
www.lockelord.com
Allison M. O'Neil
Direct Telephone: 617-239-0729
Direct Fax: 866-227-5279
allison.oneil@lockelord.com
August 2, 2022
VIA EMAIL ONLY TO CCs
Hon. James E. Clyburn, Chairman
Select Subcommittee on the Coronavirus Crisis
United States House of Representatives
2157 Rayburn House Office Building
Washington, D.C. 20515
Re: Response to July 1, 2022 Letter
Dear Representative Clyburn:
As you know, Locke Lord LLP represents Harvest Small Business Finance, LLC (“Harvest”) in
connection with its response to the Subcommittee’s letter of July 1, 2022. We are writing to
respond to Information Requests Nos. 1 and 3, which were highlighted as priority items by
Brandon White and Molly Claflin on a video conference on July 25, 2022.
1. Please explain the Harvest Small Business Finance, LLC (Harvest) process for identifying
ineligible applicants and preventing fraud related to PPP loan applications received from
Womply, including detailed descriptions of any programs enacted to provide oversight of
the services provided by Womply and the names and titles of the staff tasked with
overseeing those programs.
The Paycheck Protection Program (“PPP”) was, from inception, designed to be a “borrower
certified” program. The Small Business Administration’s (“SBA”) first Interim Final Rule (“IFR”)
addressing the implementation of the relevant sections of the CARES Act makes clear that, other
than four limited, specific “items” of each borrower’s application that the lender is tasked with
“confirming,” lenders “rely on certifications of the borrower in order to determine eligibility of the
borrower and use of loan proceeds and to rely on specified documents provided by the borrower
to determine qualifying loan amount ….” 85 Fed. Reg. 20,812 (Apr. 15, 2020). Lenders are tasked
with confirming (i) “receipt of borrower certifications contained in [the PPP] Application form
…;” (ii) “receipt of information demonstrating that a borrower had employees for whom the
borrower paid salaries and payroll taxes on or around February 15, 2020;” (iii) the dollar amount
128293727v.12
The Honorable James E. Clyburn
August 2, 2022
Page 2
of average monthly payroll costs for the preceding calendar year by reviewing the payroll
documentation submitted with the borrower’s application;” and following applicable Bank
Secrecy Act requirements. Id. at 20,815. Each lender’s “obligation under the PPP is limited to the
items above and reviewing the ‘Paycheck Protection Application Form.’” Id.
Between April and December 2020, Harvest instituted a process, created and managed by
Harvest’s Chief Operating Officer Adam Seery (“Seery”), to process every loan application it
received in accordance with the SBA’s guidance described above. At this time, Harvest was
primarily processing loans from small businesses with dozens or more employees, and the average
loan was approximately $239,500. Due to the volume of applications Harvest received, virtually
every Harvest employee was processing loan applications at some point during this time period.
Harvest’s employees were working around the clock to process as many eligible applications as
possible; Seery and his team routinely worked 18-hour days. During this time, Harvest’s
employees were also fielding constant inquiries from applicants inquiring into the status of their
loans.
Harvest also hired 20-25 additional temporary employees to process loan applications. Harvest’s
management provided constant guidance and instruction to Harvest’s permanent and temporary
employees to ensure that the applications Harvest was approving complied with the CARES Act
and evolving SBA regulations and guidance. For instance, over the course of the Program,
Harvest’s management sent more than 115 updated sets of instructions based on ever-changing
rules and guidance from the SBA. Further, despite the limited responsibility that Harvest had
under the IFR’s, Harvest aimed to perform a more thorough review of these loan applications
during processing than required. For instance, Harvest’s employees were instructed to search the
relevant Secretary of State’s website to confirm that the applicant business was registered to do
business in the state. Harvest’s employees also performed “Google” searches to verify the
existence and operation of the applicant business. Harvest continued to refine its process for these
types of loans as guidance from the SBA evolved.
Beginning in January 2021, the Economic Aid Act expanded PPP with the aim of providing more
relief to borrowers that may have been unable to take advantage of the Program in 2020, including
businesses with fewer than 20 employees, independent contractors, self-employed borrowers, and
sole proprietors, commonly referred to as “Schedule C” borrowers. For this part of the Program,
the lenders’ role was explicitly limited even further. Lenders were only required to:
“(A) Confirm receipt of borrower certifications …; (B) Confirm
receipt of information demonstrating that a borrower was either an
eligible self-employed individual, independent contractor, or sole
proprietorship with no employees or had employees for whom the
borrower paid salaries and payroll taxes on or around February 15,
2020; (C) Confirm the dollar amount of average monthly payroll
costs …; (D) For a Second Draw PPP Loan greater than $150,000
or a loan of $150,000 or less where the borrower provides
documentation of revenue reduction, confirm the dollar amount and
percentage of the borrower’s revenue reduction by performing a
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The Honorable James E. Clyburn
August 2, 2022
Page 3
good faith review, in a reasonable time, of the borrower’s
calculations …; and (E) Follow applicable BSA requirements.”
86 Fed. Reg. 3,721 (Jan. 14, 2021).
The IFR’s issued during this part of the Program confirmed that the lender’s role was limited and
that the Program largely relied on the certifications made by borrowers to determine eligibility. 86
Fed. Reg. 3,692 (Jan. 14, 2021) (“Lenders must comply with the applicable lender obligations set
forth in this interim final rule, but will be held harmless for borrowers’ failure to comply with
program criteria ….”); 86 Fed. Reg. 3,712 (Jan. 14, 2021) (“A lender may rely on any certification
or documentation submitted by an applicant for a PPP loan” that is submitted pursuant to all
relevant requirements and makes the required attestations regarding eligibility.).
In addition to the expansion of the Program to Schedule C borrowers, in March 2021, the SBA
issued an IFR further clarifying that “a Schedule C filer may elect to calculate the owner
compensation share of its payroll costs … based on either (i) net profit or (ii) gross income ….”
86 Fed. Reg. 13,150 (Mar. 8, 2021).
As a result of the changes made in 2021, more borrowers became eligible for (in some cases,
larger) loans1, and demand instantly and significantly increased. In order to meet this demand—
and meet Congress’ and the SBA’s goal of “provid[ing] relief to small businesses and their
employees and expand[ing] access to the PPP” (Id. at 13,154)—Harvest, like many other lenders,
entered into a contractual relationship with Oto Analytics, Inc. d/b/a Womply (“Womply”)
whereby Womply acted as a “Referral Agent” and simultaneously provided the use of its
technology platform, known as “Fastlane,” to expedite the processing of loan applications and
refer complete applications from eligible borrowers to Harvest. Womply demonstrated that the
technology it was using could meet the Program’s requirements. Womply indicated that it was
working directly with Bill Briggs, head of the Paycheck Protection Program at the SBA, to ensure
the Fastlane program was meeting all of the SBA’s requirements. In addition, Womply assured
Harvest that it would only refer to Harvest complete applications that Womply’s platform had
confirmed were for eligible borrowers. Womply, both to Harvest and publicly, represented it was
capable of performing this service because of its close association with the SBA. See, PPP Launch-
FAQ’s with the SBA for Contract workers, https://www.youtube.com/watch?v=mt8VQXSNCIE
(Jan. 19, 2021); PPP Launch – FAQ’s with the SBA for Small Businesses,
https://www.youtube.com/watch?v=DtLAiNbpEes (Jan. 19, 2021).
Notwithstanding Womply’s assurances and the SBA’s apparent endorsement of Womply’s
platform, Harvest still performed its own reviews of many applications it received from Womply
to ensure borrower eligibility and to identify potentially fraudulent applications. At the inception
of Harvest’s relationship with Womply, Harvest’s processors and management reviewed a sample
1
In the March 8, 2021 IFR, the SBA noted that “the use of gross income by Schedule C filers may, in some cases,
increase the risk of waste, fraud, or abuse, because it will substantially increase the maximum loan amount for
relevant applicants, and in some cases an applicant’s gross income may not accurately reflect the extent to which a
PPP loan is necessary to support the ongoing operations of the applicant’s business.”
128293727v.12
The Honorable James E. Clyburn
August 2, 2022
Page 4
set of each batch of loans Harvest submitted to the SBA for review and approval to ensure that the
documents required by the SBA were included in the applications it was receiving.
Harvest also identified “patterns” of ineligible or potentially fraudulent applicants and
applications. For instance, during its manual review of loan files, Harvest became aware that
applications were being submitted with Employer Identification Numbers (“EIN”) that did not
match the stated year of formation of the applicant business. Harvest then identified applications
containing this discrepancy, stopped those applications from being processed if they had not
already been submitted or funded, and alerted the SBA Office of Inspector General (“OIG”) (the
law enforcement arm of the SBA, Harvest’s regulator) to the potential ineligibility and/or fraud.
Harvest estimates that it identified thousands of potentially fraudulent applications based on its
searches for these kinds of patterns and either canceled or declined them before funding, or
immediately alerted the SBA if the application had already been submitted for approval.
In fact, Harvest believes that it identified and reported more ineligible and/or fraudulent
applications than if it had simply been performing a manual review of loan applications without
identifying and investigating these patterns and connections. Because of the minimal
documentation required by the SBA for Schedule C borrowers, and the fact that many of the
leading indicators of ineligibility and fraud, such as multiple applications fraudulently submitted
by the same applicant, were only evident when reviewed in context with other applications, even
a careful review of each document submitted with a single application would not always indicate
that a borrower may be ineligible or an application may be fraudulent. Thus, Harvest (while
keeping up with the onslaught of Fastlane applications and the ever-changing guidance from the
SBA) searched for and investigated indicia of fraud by reviewing certain groups of loans in the
aggregate.
Moreover, when applications were submitted to the SBA for final review and approval, the SBA
performed its own “Compliance Checks,” and, if potential ineligibility, fraud, or abuse was
discovered by the SBA, the SBA would issue a “Hold Code,” placing the application on hold and
alerting Harvest to the potential ineligibility, fraud, or abuse. See SBA Procedural Notice No.
5000-20092, Feb. 10, 2021 (“After issuance of the SBA Loan Number, all First Draw PPP Loans
made in 2020 were individually screened by an automated tool … that may indicate non-
compliance with eligibility requirements, fraud, or abuse …. In 2021, before issuance of an SBA
loan number, SBA is conducting front-end Compliance Checks on Lender loan guaranty
applications for new First Draw PPP Loans and Second Draw PPP Loans using a modified version
of the automated screening tool and information from the Department of Treasury Do Not Pay
lists.”). Harvest worked with the SBA and Womply to resolve any “Hold Codes,” where
appropriate, and to confirm suspected instances of ineligibility, attempted fraud, or abuse.
Finally, Harvest has been diligent in continuing to identify and report instances of suspected fraud,
and assisting in investigating instances of suspected fraud. Harvest carefully reviews applications
for loan forgiveness for indications that a loan may have been obtained fraudulently. Further, since
the inception of the Program, Harvest has been in constant communication with the SBA OIG, as
well as multiple other federal agencies, including the Department of Treasury Criminal
Investigation Unit, the U.S. Treasury Inspector General for Tax Administration (“TIGTA”), the
Secret Service, and the FBI. Harvest has worked hand-in-hand with these agencies to investigate
128293727v.12
The Honorable James E. Clyburn
August 2, 2022
Page 5
suspected fraud, and continues to work with these agencies, as well as state and local law
enforcement, to identify and investigate instances of suspected fraud.
3. How many PPP loan applications did Harvest receive from Womply for onward
submission to the SBA?
a. How many of these loan applications received a manual review by employees of
Harvest to verify eligibility or to identify fraud?
b. How many of these loan applications were rejected, denied, or not submitted to the
SBA at the direction of Harvest employees and due to suspicion of fraud or
ineligibility? Please exclude incomplete applications from this total.
Harvest was referred more than 800,000 applications from Womply that were processed using
Womply’s Fastlane technology platform. Harvest did not maintain metrics regarding the number
of these applications that it manually reviewed, or that it suspected were fraudulent or ineligible.
As explained above, however, Harvest performed reviews of a sample set of each batch of loan
applications it submitted to the SBA until Harvest was confident that the Fastlane program was
properly collecting all of the requisite documentation. Harvest also reviewed applications for
which it identified potential ineligibility and/or fraud, and which fit a “pattern” indicating
ineligibility or fraud that Harvest had identified. Harvest estimates that it has reviewed tens of
thousands of applications in connection with these types of reviews. Moreover, as explained above,
Harvest believes that it identified and reported more ineligible and/or fraudulent applications by
conducting this type of review and investigation, than if it had simply been performing a manual
review of a sample of loan applications without identifying and investigating these patterns and
connections. Harvest also continues to review applications that have already been submitted to the
SBA to continue to identify potential ineligibility and/or fraud.
Harvest submitted approximately 600,000 of these applications to the SBA for further review and
approval by the SBA. Of the 200,000 applications that Harvest did not submit to the SBA, Harvest
suspects that a significant portion of them were potentially ineligible or fraudulent.
***
Harvest requests that the internal, proprietary information provided herein be given confidential
treatment. If the Subcommittee plans to make any documents publicly available, we request that
it provide reasonable notice of any such intention by contacting me via email.
Please do not hesitate to reach out with any questions.
128293727v.12
The Honorable James E. Clyburn
August 2, 2022
Page 6
Very truly yours,
Allison M. O’Neil
Encl.
cc: Brandon White (via email)
Molly Claflin
Laura O’Neill
128293727v.12
Tel 305 374 8500 Holland & Knight LLP
Fax 305 789 7799 701 Brickell Avenue, Suite 3300
Miami, FL 33131
www.hklaw.com
Wifredo A. “Willy” Ferrer
305-789-7780
Wifredo.Ferrer@hklaw.com
August 5, 2022
VIA EMAIL
The Hon. James E. Clyburn
(c/o Derek Collins (Derek.Collins@mail.house.gov)
Chairman
Select Subcommittee on the Coronavirus Crisis
House of Representatives
Congress of the United States
2157 Rayburn House Office Building
Washington, D.C. 20515-6143
Dear Mr. Chairman:
As you know, Holland & Knight LLP represents Benworth Capital Partners, LLC
(“Benworth”) in connection with your April 26, 2022 request for information (the “April RFI”)
and your July 1, 2022 request for information (the “July RFI”). As stated therein, the April RFI
and the July RFI relate to a Select Subcommittee investigation into potential waste, fraud, and
abuse in Paycheck Protection Program (“PPP”) loans facilitated by financial technology
(“FinTech”) companies.
A. Information Requests
Below we respond to the questions raised in the July RFI. For ease of reference, we state your
questions followed by our responses.
1. Please explain the Benworth Capital (Benworth) process for identifying ineligible
applicants and preventing fraud related to PPP loan applications received from Womply,
including detailed descriptions of any programs enacted to provide oversight of the
services provided by Womply and the names and titles of the staff tasked with overseeing
those programs.
Benworth’s Response:
We start by providing important context and background information related to
Benworth, its history and its relationship with Oto Analytics, Inc. (“Womply”). This will
assist in painting a more complete and accurate picture of Benworth’s connection to your
investigation.
Established in 2008, Benworth is a minority owned licensed mortgage
lender/servicer in the state of Florida. Benworth was approved as a PPP lender on April
21, 2020 for the second round of PPP lending authorized by Congress. While Benworth
had been on the lending business for years, PPP was Benworth’s first experience with
SBA lending and regulations.
Benworth and Womply began their business relationship in or around February
2021, a few months before PPP ended in May 2021. Womply had developed Fast Lane,
an online platform for the completion and filing of PPP applications. Fast Lane was
designed for PPP applications from “non-employer businesses” (e.g., house contractors,
truckers, real estate agents, cleaners, etc.). Benworth is a mission-based lender that
serves these exact types of borrowers, borrowers who have less access to traditional bank
lending. And after months of isolating and practicing social distancing due to COVID-
19, these borrowers desperately needed PPP relief funds by early 2021 to stay afloat.
Benworth saw Fast Lane as a valuable tool to help its customer base and allow the faster
processing of PPP loans while ferreting out unqualified borrowers and fraudsters.
Through Fast Lane, applicants submitted to Womply information and documents
required under PPP and other applicable laws and regulations. A key service Womply
offered was verifying—on the basis of such information and documents—the applicant’s
eligibility for a PPP loan. Fast Lane also had technological controls during the
application process to, among other things, validate the applicant’s: (i) identity, (ii)
authenticity and type of documents submitted, (iii) calculations for the PPP loan amount,
and (iv) bank account information. These controls were aimed at preventing fraud related
to identity theft, using fake documents, or the same person obtaining multiple PPP loans.
Womply’s controls were supported by the services of reputable technology firms like
LexisNexis, DocuSign, Plaid and Persona. A primary reason why Benworth contracted
with Womply was Fast Lane and its ability to identify ineligible applicants and stop
fraud.
Benworth was not prohibited from relying on Womply for eligibility verification
and fraud prevention. But as the lender of record, Benworth did oversee Womply’s
services. It was not feasible under the time-sensitive circumstances to have written
policies and procedures specific to PPP applications referred by Womply. 1 Benworth,
after all, started working with Womply when PPP was an ongoing program that was soon
ending. Benworth was reviewing tens of thousands of PPP applications per week, and
SBA officials were encouraging lenders to process PPP applications faster. The SBA’s
own management later admitted that the “focus had to be on providing financial
assistance as quickly as possible to respond to the crisis rather than carefully reviewing
PPP loans.” 2 In this fast-paced, time-sensitive environment, it was not possible to
embark on the time-consuming process necessary to create written policies and
procedures.
1
Benworth did have an “Anti-Money Laundering Program – Suspicious Activity Reporting Policy – Know Your
Client/Customer (KYC) Policy” manual from before the PPP for its non-PPP business. Although not specific to the
PPP applications referred by Womply, Benworth personnel relied on this manual for general guidance on fraud and
how to detect it.
2
U.S. SMALL BUS. ADMIN.’S OFFICE OF INSPECTOR GEN., SBA’S HANDLING OF POTENTIALLY FRAUDULENT
PAYCHECK PROTECTION PROGRAM LOANS (Report 22-13) app. C (2022) [hereinafter the “SBA-OIG Report”].
2
In addition, the PPP rules regarding what constituted fraud and the amount of due
diligence expected from lenders were not clear. On the one hand, PPP regulations
required lenders to follow applicable Bank Secrecy Act (“BSA”) requirements to detect
illegal activity like fraud. 3 On the other hand and because “[s]peed became the highest
priority,” 4 PPP regulations told lenders they could rely on self-certifications and
attestations made by the applicants regarding their eligibility and the accuracy of their
documents. 5 And if they relied in “good faith,” lenders were given a safe harbor against
an “enforcement action” and “any penalties relating to loan origination or forgiveness” of
PPP loans. 6 This meant that lenders like Benworth were largely permitted to take the
applicant’s word as true as to his or her PPP application. This is different from the type
of due diligence required under the BSA, which involves some independent verification
of an applicant’s information and documents. 7 As the SBA’s Inspector General wrote in
an official report, the “SBA did not provide lenders specific and sufficient guidance to
effectively identify, track, address, and resolve potentially fraudulent PPP loans.” 8 As a
result, lenders “were faced with uncertainty on how to resolve issues they were
uncovering.” 9 This made the adoption of written policies and procedures even more
challenging.
While it did not have a written program, Benworth did exercise a more than
reasonable degree of control and review over Womply’s services. Benworth never
worked with Womply before. Thus, for the first five weeks of the relationship, Benworth
conducted manual reviews of every application package (including PPP forms and
supporting documents) referred by Womply through Fast Lane. There was a short set of
written instructions in an internal PPP guidance document accessible to Benworth’s
employees, which specifically instructed them to review the applicants’ tax documents
for possible fraud. The manual reviews were done by Benworth employees who received
training on PPP requirements and BSA compliance.
During the approximately four months when they worked together, Benworth
communicated regularly with Womply to discuss possible flaws in Womply’s controls
and other related matters. Many issues flagged by Benworth contributed to actual
improvements in Womply’s platform (e.g., after Benworth reported application packages
containing the supporting documents of other applicants, Womply changed its provider of
KYC data collection services). In most exchanges, Womply accommodated Benworth
3
86 Fed. Reg. 3692, 3708 (Jan. 14, 2021) [hereinafter “First Draw PPP IFR”]; 86 Fed. Reg. 3712, 3721 (Jan. 14,
2021) [hereinafter “Second Draw PPP IFR”].
4
SBA-OIG Report, supra note 2 at 2.
5
First Draw PPP IFR, supra note 3, at 3708; Second Draw PPP IFR, supra note 3, at 3721.
6
Id.
7
To add even more confusion, there was the fact that the U.S. Department of the Treasury was involved in the
drafting and promulgation of these PPP rules. One of Treasury’s bureaus is the Financial Crimes Enforcement
Network (“FinCEN”), which has played a pivotal role in the design of the current BSA regulations and is probably
one of their most important interpreters.
8
SBA-OIG Report, supra note 2 at 8.
9
Id. at 10.
3
and provided assurances it would fix the issues Benworth spotted. As Womply’s controls
improved, Benworth went from manually reviewing every application package to
reviewing a sample size (first one out of five packages, then one out of ten, and so on).
In total, Benworth personnel conducted manual reviews of over 100,000 application
packages received from Womply, one third of the total loans Womply sent to
Benworth. 10
In the final weeks of PPP, Benworth discovered that Womply was not providing
Benworth with the applicants’ supporting documents in many of the packages being
submitted. Around this time, Benworth also started receiving complaints—and even
some subpoenas—relating to loans referred by Womply (which Benworth investigated,
leading Benworth to report to the SBA and to the Financial Crimes Enforcement Network
approximately 4,000 potentially suspicious PPP loans.). The relationship with Womply
changed at that moment. There were many discussions and disagreements about
Womply’s performance. Benworth mentioned discontinuing its work with Womply.
Simultaneously, a dispute relating to PPP fees arose between Benworth and Womply.
And around July 2021, Womply terminated its agreements with Benworth and stopped
providing services (Womply thus terminated Benworth’s access to Fast Lane, where PPP
forms and supporting documents were located).
Within a short period of time, Womply became Benworth’s top source for PPP
referrals. Consequently, from the very beginning, a lot of people at Benworth were
involved in the Benworth and Womply relationship. These included the top three officers
involved in PPP operations (Bernardo Navarro – President; Toya de la Cruz – PPP
Operations Manager; and Mildred J. Avila – Comptroller), other Benworth employees,
and more than 30 temporary Benworth employees hired to work on PPP applications.
In conclusion, Womply handled eligibility verification and fraud prevention in
connection with hundreds of thousands of PPP applications referred to Benworth by
Womply. Due to time constraints and unclear PPP rules, Benworth could not adopt a
written program specific to Womply’s PPP applications. But in practice, Benworth spent
significant time, energy, and resources monitoring Womply’s performance. This
included manual review by Benworth personnel of a large number of application
packages and repeated discussions with Womply’s top officers. In the frightening,
urgent, and uncertain COVID-19 environment, Benworth’s actions were reasonable,
appropriate, and complied with applicable laws and regulations.
2. In what way and to what extent did Benworth rely on the automatic checks, Know Your
Customer (KYC) management, bank and tax document analysis, and anti-fraud measures
undertaken by Womply when determining whether Benworth would submit a PPP loan
application to the Small Business Administration (SBA) for approval and funding?
Benworth’s Response:
10
For further details, see infra our responses to questions 3 and 3.a.
4
As stated in our response to information request 1 above, a primary reason
Benworth worked with Womply was because Womply’s services included identifying
ineligible applicants and preventing fraud. To timely provide these services in
connection with hundreds of thousands of PPP applications, Womply relied on automated
checks and other technological tools supported by reputable technology firms (e.g.,
LexisNexis, DocuSign, Plaid, Persona, etc.). Womply’s Fast Lane platform included a
number of controls during the application process, designed to, among other things,
validate the applicant’s identity, the authenticity and type of documents submitted, the
applicant’s calculations for the PPP loan amount, and the applicant’s bank account
information.
We also explained above how Benworth personnel conducted manual reviews of
over 100,000 (about one-third of the total) application packages received from Womply.
These reviews were done by employees trained in PPP requirements and BSA
compliance (including fraud prevention). Obviously, Benworth did not duplicate
Womply’s technological controls—a primary purpose of working with Womply was to
access and rely on its technological tools. But in the manual reviews, Benworth
personnel were instructed to—and did—review the whole application package to
determine if Womply’s technological controls were working well. For instance,
Benworth personnel reviewed completion reports for identity-verification checks to
compare the pictures in the applicants’ selfies and their government-issued IDs.
Similarly, following specific instructions, Benworth personnel conducted independent
review of the applicants’ tax records to confirm that they appeared legitimate, were the
type permitted under PPP regulations, and supported the applicants’ loan amount
calculations.
Benworth’s manual reviews uncovered many incomplete or suspicious PPP
applications that it then rejected. And Benworth likewise confirmed no red flags in many
PPP applications received from Womply. As discussed above, Benworth was in constant
communication with Womply to discuss questions or flaws connected to Womply’s
controls and to provide other important feedback. Benworth grew concerned when
complaints rose in the final weeks of PPP. While the number of complaints received and
investigated by Benworth was under 2% of the total PPP loans referred by Womply,
Benworth took these complaints seriously and sought to remedy all problems. 11 To date,
Benworth has flagged and reported to government authorities roughly 4,000 potentially
suspicious PPP loans.
Benworth was not prohibited from utilizing Womply to check eligibility
verification and spot fraud. Benworth also exercised reasonable, diligent oversight of
Womply’s services. As SBA officials have acknowledged, speed was the priority and
fraud prevention rules were unclear. 12 In other words, Benworth acted prudently and
responsibly in very uncertain times in the midst of an economic calamity for millions of
Americans.
11
This percentage is similar to the total percentage of loans identified by the SBA’s OIG as being potentially
fraudulent loans identified. SBA-OIG Report, supra note 2 at app. C (“Although the volume of [complaints] may
have been unprecedented, the volume of PPP loans made by the SBA was also unprecedented”).
12
See supra notes 2, 8-9.
5
3. How many PPP loan applications did Benworth receive from Womply for onward
submission to the SBA?
Benworth’s Response:
Among other items, Womply’s Fast Lane platform stored PPP applications
rejected by Benworth in which the SBA never assigned a loan number. As advised in
response to information request 1, Womply terminated Benworth’s access to Fast Lane
around July 2021. Benworth did not have copies of the PPP applications without SBA
numbers when this occurred. But to the best of its recollection, Benworth estimates that
the total number of such applications ranged from 85,000 to 100,000. The PPP
applications without SBA numbers are part of the total number of applications received
from Womply, and thus our response is based on our best estimate (not an exact count).
Taking into account this estimate plus PPP applications that were submitted to the
SBA and other rejected applications which had assigned SBA numbers, Benworth
estimates that it received a total of 423,782 to 438,782 PPP applications from Womply.
a. How many of these loan applications received a manual review by employees of
Benworth to verify eligibility or to identify fraud?
Benworth’s Response:
The exact number of PPP applications that received a manual review to verify
eligibility or to identify fraud is hard to estimate.
First, Benworth did not track PPP applications that were reviewed before funding
and then approved. These applications were part of the larger group of approved
applications that Benworth tracked, but which also included PPP applications approved
without review.
Second, while there are records of PPP applications that were reviewed before
funding but then rejected, such records (as maintained in the ordinary course of business)
are not organized to identify which were rejected for ineligibility, possible fraud, or for
being incomplete. These records include the 85,000 to 100,000 PPP applications without
SBA numbers stored only in Fast Lane, plus approximately 33,000 other PPP
applications that do have SBA numbers.
Third, Benworth reviewed 4,351 PPP applications after they were approved and
funded.
b. How many of these loan applications were rejected, denied, or not submitted to
the SBA at the direction of Benworth employees and due to suspicion of fraud or
ineligibility? Please exclude incomplete applications from this total.
Benworth’s Response:
6
c. What were the total budgets for, and amounts allocated to, AML, BSA, eligibility
verification, and fraud compliance at Benworth in 2019, 2020, and 2021,
excluding amounts budgeted or allocated to third party contractors? Please
include a breakdown of these expenses.
Benworth’s Response:
As kept in the ordinary course of business, Benworth’s records are not organized
allowing identification of the information requested. If third parties’ services are
excluded, Benworth’s main compliance resource and expense were its employees.
Benworth allocated $473,695.25 to payroll expenses in 2019, $740,553.98 in 2020, and $
1,254,169.15 in 2021. Many Benworth employees performed eligibility verification or
compliance work during PPP but not on a full-time basis. Salaries and related payments
to these employees would certainly be expenses allocated to compliance, but just
partially. And there is no information we have identified to determine what portion
corresponded to eligibility verification or compliance work (as opposed to other, non-
compliance work).
6. What was the total dollar amount of the disbursements, payouts, or other payments that
were made to Benworth and its parent/holding company shareholders, executives, or
owners in 2020, 2021, and 2022?
Benworth’s Response:
Benworth President Bernardo Navarro is the sole shareholder of the company. As
such, all profits ultimately flow to him. Please note, however, that because of the dispute
with Womply concerning PPP fees, a major portion of Benworth’s PPP income is under
discussion and may ultimately change depending on the outcome of such dispute.
B. Documents
Pursuant to the April RFI, we issued a document production to you on May 10, 2022.
That production contained documents Bates stamped BWSSCCResp0000001 to
BWSSCCResp0000033. And now pursuant to the July RFI, we hereby produce documents
Bates stamped BWSSCCResp0000033 to BWSSCCResp0000052. This production includes all
records in Benworth’s possession, custody, or control we have been able to identify concerning
document request 3 in the July RFI. Please note that we have not waived any applicable
privileges. As such, any production or disclosure of privileged materials is inadvertent. And on
behalf of Benworth, we hereby certify that (i) a diligent search has been completed of all
documents in Benworth’s possession, custody, or control that reasonably could contain
responsive material; and (ii) all responsive documents located during the search have been
produced to the Select Subcommittee.
As to document request 1 in the July RFI, Benworth is not in possession, custody, or
control of responsive records.
9
Regarding document request 2 in the July RFI, when we spoke with your staff on July
22nd, we agreed that for the time being, we will provide the following information in lieu of
responsive records:
a. As stated in response to information requests 3 and 3.a above, we estimate that
Womply referred a total of 423,782 to 438,782 PPP applications to Benworth, and
we estimate that Benworth personnel conducted manual reviews of at least
122,351 of these applications to, among other things, verify eligibility or to
identify fraud. Further, we estimate that at least 118,000 of the PPP applications
in question were reviewed before the loan was funded, and 4,351 of them after the
loan was funded.
b. As advised in our responses to information requests 1 and 2 above, all PPP
applications referred by Womply were subject to manual review before funding
during the first five weeks of the relationship. When Benworth began reviewing
only a sample size, the PPP applications subject to manual review were randomly
selected. Lastly, the PPP applications that were reviewed post-funding were
selected after Benworth received either a complaint or subpoena in relation to
them.
c. We also explained in our responses to information requests 1 and 2 how these
PPP applications were reviewed. Benworth personnel was instructed to review
the whole application package (including PPP forms and supporting documents)
received from Womply to ensure completion, eligibility, and that the applicant
passed Womply’s fraud-prevention controls, among others.
If you have any questions or issues related to this matter, please contact us.
Sincerely yours,
Wifredo A. Ferrer
cc: Brandon White (Brandon.White@mail.house.gov)
Jennifer Gaspar (Jennifer.Gaspar@mail.house.gov)
Molly Claflin (Molly.Claflin@mail.house.gov)
Laura O’Neil (Laura.O'Neill@mail.house.gov)
Matthew Ellison (Matthew.Ellison@mail.house.gov)
Michael E. Hantman (michael.hantman@hklaw.com)
Marcelo Ovejero (marcelo.ovejero@hklaw.com)
Denise Perlich (denise.perlich@hklaw.com)
10
111 Huntington Avenue
9th Floor
Boston, MA 02199-7613
Telephone: 617-239-0100
Fax: 617-227-4420
www.lockelord.com
Allison M. O'Neil
Direct Telephone: 617-239-0729
Direct Fax: 866-227-5279
allison.oneil@lockelord.com
August 31, 2022
VIA EMAIL ONLY TO CCs
Hon. James E. Clyburn, Chairman
Select Subcommittee on the Coronavirus Crisis
United States House of Representatives
2157 Rayburn House Office Building
Washington, D.C. 20515
Re: Response to July 1, 2022 Letter
Dear Chairman Clyburn:
As you know, Locke Lord LLP represents Harvest Small Business Finance, LLC (“Harvest”) in
connection with its response to the Subcommittee’s letter of July 1, 2022. We are writing to
respond to Information Request Nos. 2 and 4-6. Furthermore, we write to inform you that we plan
to produce additional responsive documents tomorrow, September 1, and will continue rolling
productions thereafter, pursuant to our discussions with Laura O’Neill.
2. In what way and to what extend did Harvest rely on the automatic checks, Know Your
Customer (KYC) management, bank and tax document analysis, and anti-fraud measures
undertaken by Womply when determining whether Harvest would submit a PPP loan
application to the Small Business Administration (SBA) for approval and funding?
As Harvest explained in its August 2, 2022 letter providing its response to Information Request
No. 1, in order to meet the increased demand for PPP loans created by the expansion of the changes
made to the PPP Program in 2021, as well as meet Congress’ and the SBA’s goal of “provid[ing]
relief to small businesses and their employees and expand[ing] access to the PPP” (86 Fed. Reg.
13,154 (Mar. 8, 2021), Harvest entered into a contractual relationship with Oto Analytics, Inc.
d/b/a Womply (“Womply”) whereby Womply acted as a “Referral Agent” and simultaneously
provided the use of its technology platform, known as “Fastlane,” to expedite the processing of
loan applications and refer complete applications from eligible borrowers to Harvest.
128764888v.10
The Honorable James E. Clyburn
August 31, 2022
Page 2
Womply demonstrated that its process met the Program’s requirements. Womply indicated that it
was working directly with Bill Briggs, head of the Paycheck Protection Program at the SBA, to
ensure the Fastlane program was meeting all of the SBA’s requirements. In addition, Womply
assured Harvest that it would only refer to Harvest complete applications that Womply’s platform
had confirmed were for eligible borrowers. Womply, both to Harvest and publicly, represented it
was capable of performing this service because of its close association with the SBA.1
Notwithstanding Womply’s assurances and the SBA’s apparent endorsement of Womply’s
platform, Harvest still performed its own reviews of many applications it received from Womply
to ensure borrower eligibility and to identify potentially fraudulent applications. At the inception
of Harvest’s relationship with Womply, Harvest’s processors and management reviewed a sample
set of each batch of loans Harvest submitted to the SBA for review and approval to ensure that the
documents required by the SBA were included in the applications it was receiving.
Harvest also identified “patterns” of ineligible or potentially fraudulent applicants and
applications. For instance, during its manual review of loan files, Harvest became aware that
applications were being submitted with Employer Identification Numbers (“EIN”) that did not
match the stated year of formation of the applicant business. Harvest then identified applications
containing this discrepancy, stopped those applications from being processed if they had not
already been submitted or funded, and alerted the SBA Office of Inspector General (“OIG”) (the
law enforcement arm of the SBA, Harvest’s regulator) to the potential ineligibility and/or fraud.
Harvest estimates that it identified thousands of potentially fraudulent applications based on its
searches for these kinds of patterns and either canceled or declined them before funding, or
immediately alerted the SBA if the application had already been submitted for approval.
In fact, Harvest believes that it identified and reported more ineligible and/or fraudulent
applications than if it had simply been performing a manual review of loan applications without
identifying and investigating these patterns and connections. Because of the emergency nature of
the Program, the minimal documentation required by the SBA for Schedule C borrowers, and the
fact that many of the leading indicators of ineligibility and fraud, such as multiple applications
fraudulently submitted by the same applicant, were only evident when reviewed in hindsight
and/or through the high-level business analytics, even a careful, real-time review of each document
submitted with a single application would not always indicate that a borrower may be ineligible or
an application may be fraudulent. Thus, Harvest (while processing the high volume of Fastlane
applications and adhering to evolving guidance revisions from the SBA) searched for and
investigated indicia of fraud by reviewing certain groups of loans in the aggregate.
1
See PPP Launch- FAQ’s with the SBA for Contract workers, https://www.youtube.com/watch?v=mt8VQXSNCIE
(Jan. 19, 2021); PPP Launch – FAQ’s with the SBA for Small Businesses,
https://www.youtube.com/watch?v=DtLAiNbpEes (Jan. 19, 2021).
128764888v.10
The Honorable James E. Clyburn
August 31, 2022
Page 3
4. For the below questions, unless otherwise instructed, please provide answers
corresponding to the 2021 fiscal year. If necessary to fully answer the below questions,
please include information related to parent, holding, and other related entities.
a. What was the processing fee income generated from Harvest’s participation in the
PPP?
Lenders’ fees for processing PPP loans were prescribed by the SBA. Pursuant to SBA Procedural
Notices 5000-20036 and 2000-20091, for first draw PPP loans processed before December 27,
2020, the SBA paid lenders fees in the following amounts:
“Five (5) percent for loans of not more than $350,000;
Three (3) percent for loans of more than $350,000 and less than $2,000,000; and
One (1) percent for loans of at least $2,000,000.”
After December 27, 2020, the SBA paid lenders the following amounts for processing first draw
PPP loans:
“Fifty (50) percent or $2,500, whichever is less, for loans of not more than $50,000;
Five (5) percent for loans of more than $50,000 and not more than $350,000;
Three (3) percent for loans of more than $350,000 and less than $2,000,000; and
One (1) percent for loans of at least $2,000,000.”
Finally, the SBA paid lenders fees for processing all second draw PPP loans in the following
amounts:
“Fifty (50) percent or $2,500, whichever is less, for loans of not more than $50,000;
Five (5) percent for loans of more than $50,000 and not more than $350,000; and
Three (3) percent for loans above $350,000.”
SBA Procedural Notice No. 5000-20091. “Under 15 U.S.C. § 636(a)(36)(P) and 15 U.S.C. §
636(a)(37)(L), all processing fees [were] based on the balance of the PPP loan outstanding at the
time of full disbursement of the loan.”
Based on the above statutory rate structure, Harvest ultimately retained $319,282,668.92 in fees
from the SBA in Fiscal Year (“FY”) 2021. SBA paid Harvest $1,074,907,943.72 in fees from the
SBA for PPP loans for which it was the lender, and, based on its contractual agreement with
Womply, a majority of those fees were paid to Womply for the services it provided to Harvest.
b. What was Harvest’s total revenue from operations? How did this compare to the
2020 fiscal year?
Based on the U.S. Partnership Income Tax Return (Form 1065) for the tax year 2021, Harvest’s
gross receipts were $1,165,328,948. Based on the U.S. Partnership Income Tax Return (Form
1065) for the tax year 2020, Harvest’s gross receipts were $65,898,816.
128764888v.10
The Honorable James E. Clyburn
August 31, 2022
Page 4
The increase between FY 2020 and FY 2021 is due primarily to the fact that, beginning in January
2021, the Economic Aid Act (“EAA”) expanded PPP with the aim of providing more relief to
borrowers that may have been unable to take advantage of the Program in 2020, including
businesses with fewer than 20 employees, independent contractors, self-employed borrowers, and
sole proprietors, commonly referred to as “Schedule C” borrowers.2 In keeping with the goals of
the EAA these Schedule C borrowers were often otherwise ignored by the larger financial
institutions during the early rounds of funding. Thus, smaller institutions like Harvest played a
key role in providing access to PPP funds once Schedule C borrowers became eligible for the
Program.
In addition to the expansion of the Program to Schedule C borrowers, the SBA issued an IFR on
March 8, 2021, further clarifying that “a Schedule C filer may elect to calculate the owner
compensation of its payroll costs … based on either (i) net profit or (ii) gross income ….” 86 Fed.
Reg. 13,150. As a result of these changes at the beginning of 2021, more borrowers became eligible
for loans, and in some cases, loans in larger amounts3. Therefore, demand for loans from all
lenders, including Harvest, instantly and significantly increased, and Harvest was expected to
process substantially more PPP loans in order to meet the objectives of the EAA.
c. What amount of Harvest’s total revenue from operations was a result of Harvest’s
participation in the PPP?
In response to this Information Request, Harvest refers to the information provided in its response
to subpart (b), above.
d. What was Harvest’s net operating income before taxes? How did this compare to
the 2020 fiscal year?
Based on the U.S. Partnership Income Tax Return (Form 1065) for the tax year 2021, Harvest’s
ordinary business income was $356,593,726. Based on the U.S. Partnership Income Tax Return
(Form 1065) for the tax year 2020, Harvest’s ordinary business income was $29,525,892.
As discussed in response to subpart (b), above, the increase between 2020 and 2021 is due
primarily to the fact that, beginning in January 2021, the EAA expanded PPP with the aim of
providing more relief to borrowers that may have been unable to take advantage of the Program in
2020, including businesses with fewer than 20 employees, independent contractors, self-employed
borrowers, and sole proprietors, commonly referred to as “Schedule C” borrowers.4
2
Harvest’s August 2, 2022 letter further describes many of the additional changes lenders had to address with the
shift in eligibility for Schedule C borrowers in early 2021.
3
In the March 8, 2021 IFR, the SBA noted that “the use of gross income by Schedule C filers may, in some cases,
increase the risk of waste, fraud, or abuse, because it will substantially increase the maximum loan amount for relevant
applicants, and in some cases an applicant’s gross income may not accurately reflect the extent to which a PPP loan
is necessary to support the ongoing operations of the applicant’s business.”
4
Harvest’s August 2, 2022 letter further describes many of the additional changes lenders had to address with the
shift in eligibility for Schedule C borrowers in early 2021.
128764888v.10
The Honorable James E. Clyburn
August 31, 2022
Page 5
In addition to the expansion of the Program to Schedule C borrowers, the SBA issued an IFR on
March 8, 2021, further clarifying that “a Schedule C filer may elect to calculate the owner
compensation of its payroll costs … based on either (i) net profit or (ii) gross income ….” 86 Fed.
Reg. 13,150. As a result of these changes at the beginning of 2021, more borrowers became eligible
for loans, and in some cases, loans in larger amounts. Therefore, demand for loans from all lenders,
including Harvest instantly and significantly increased, and Harvest was expected to process
substantially more PPP loans in order to keep up with the intended aims of the EAA.
e. What were Harvest’s total operating expenses, including general administrative
expenses and salaries/wages? How did this compare to the 2020 fiscal year?
Based on the U.S. Partnership Income Tax Return (Form 1065) for the tax year 2021, Harvest’s
total deductions were $48,090,841. Based on the U.S. Partnership Income Tax Return (Form 1065)
for the tax year 2020, Harvest’s total deductions were $34,041,683.
f. What were Harvest’s operating expenses as a percentage of total revenues? How
did this compare to the 2020 fiscal year?
In response to this Information Request, Harvest refers to the information provided in its responses
to subparts (b) and (e), above.
g. What was the dollar value of employee and management bonus expense incurred
by Harvest? How did this compare to the 2020 fiscal year?
For FY 2021, Harvest incurred $1,150,000 in expenses for bonuses paid to employees. For FY
2020, Harvest incurred $59,500 in expenses for bonuses paid to employees.
5. If necessary to fully answer the below questions, please include information related to
relevant parent, holding, and other related entities.
a. How many total employees did Harvest have in 2020 and in 2021?
Harvest employed 98 people in 2020, and 119 people in 2021.
b. How many Harvest employees were dedicated full time and exclusively to AML,
BSA, eligibility verification, or fraud compliance, including those employed full
time to prevent, detect, or investigate potential fraud, broken up month by month,
from January 2019 to October 2021?
All relevant Harvest employees are trained and required to follow Harvest’s policies relating to
Anti-Money Laundering (“AML), the Bank Secrecy Act (“BSA”) and detecting and preventing
fraud. At the inception of Harvest’s participation in the Program, due to the volume of applications
Harvest received, virtually every one of Harvest’s employees was dedicated to processing PPP
loan applications and detecting and preventing suspected fraud and ineligibility. Throughout this
time, Harvest’s employees were working around the clock to process as many eligible applications
as possible.
128764888v.10
The Honorable James E. Clyburn
August 31, 2022
Page 6
As Harvest’s participation in the Program continued, Harvest’s loan processors became the
employees primarily responsible for processing loan applications and detecting and preventing
suspected fraud and ineligibility. During the course of the Program, Harvest employed as many as
20-25 loan processors who were trained for and charged with identifying and preventing suspected
fraud and ineligibility. All of the loan processors worked with and reported to Harvest’s Fraud
Protection Manager, Harvest’s Senior Vice President, and ultimately Harvest’s Chief Operating
Officer, Adam Seery.
In addition to Harvest’s own employees, as explained in Harvest’s August 2, 2022 letter and above,
Harvest relied on Womply and the SBA to detect fraud and ineligibility. Womply demonstrated
that the technology it was using could meet the Program’s requirements. Womply indicated that it
was working directly with Bill Briggs, head of the Paycheck Protection Program at the SBA, to
ensure the Fastlane program was meeting all of the SBA’s requirements. In addition, Womply
assured Harvest that it would only refer to Harvest complete applications that Womply’s platform
had confirmed were for eligible borrowers. Womply, both to Harvest and publicly, represented it
was capable of performing this service because of its close association with the SBA.5
Moreover, when applications were submitted to the SBA for final review and approval, the SBA
performed its own “Compliance Checks,” and, if potential ineligibility, fraud, or abuse was
discovered by the SBA, the SBA would issue a “Hold Code,” placing the application on hold and
alerting Harvest to the potential ineligibility, fraud, or abuse. See SBA Procedural Notice No.
5000-20092, Feb. 10, 2021 (“After issuance of the SBA Loan Number, all First Draw PPP Loans
made in 2020 were individually screened by an automated tool … that may indicate non-
compliance with eligibility requirements, fraud, or abuse …. In 2021, before issuance of an SBA
loan number, SBA is conducting front-end Compliance Checks on Lender loan guaranty
applications for new First Draw PPP Loans and Second Draw PPP Loans using a modified version
of the automated screening tool and information from the Department of Treasury Do Not Pay
lists.”).
c. What were the total budgets for, and amounts allocated to, AML, BSA, eligibility
verification, and fraud compliance at Harvest in 2019, 2020, and 2021, excluding
amounts budgeted or allocated to third party contractors? Please include a
breakdown of these expenses.
Due to the speed at which Harvest was required to implement new procedures for detecting and
preventing fraud in light of the constantly-evolving rules and guidance surrounding the Program,
and the fact that for a significant period during the Program, Harvest dedicated virtually all of its
resources to processing PPP loan applications—which included detecting potential fraud and
ineligibility—Harvest did not create separate budget line items for the amounts allocated to the
activities listed in this subpart.
5
See PPP Launch- FAQ’s with the SBA for Contract workers, https://www.youtube.com/watch?v=mt8VQXSNCIE
(Jan. 19, 2021); PPP Launch – FAQ’s with the SBA for Small Businesses,
https://www.youtube.com/watch?v=DtLAiNbpEes (Jan. 19, 2021).
128764888v.10
• Benworth’s responses in the August 5th Letter to items 4(d), 4(e) and 4(f). 2 After
August 5th, a Transfer Pricing Analysis was concluded. That analysis revealed
that 86% of the work to process and service PPP loans was performed through
Benworth’s Puerto Rico affiliate, Benworth Capital Partners PR, LLC. 3
In addition, we request that Congress instruct the Small Business Administration
(“SBA”) to investigate Womply’s conduct connected to the Benworth relationship. Pursuant to
the Lender and Development Company Loan Programs, 4 the SBA committed to investigate any
complaint concerning fees charged in connection with an SBA program like PPP.
Established in 2008, Benworth is a minority-owned and licensed mortgage
lender/servicer in the State of Florida that the SBA and U.S. Treasury approved to make PPP
loans on April 21, 2020. Benworth was approved during PPP’s second round when Congress
provided more funds to PPP.
While Benworth has always been a lender, the company was new to SBA lending and
associated regulations. Under the extraordinary circumstances related to PPP’s creation and roll
out (including the fact that it was a program that was new to the SBA and that was experiencing
frequent changes in parameters), Benworth ramped up and began administering loans properly in
a short amount of time. Without Benworth, a large number of borrowers—many borrowers of
whom were minority borrowers—may not have stayed afloat. And to help manage the growing
number of PPP loan applications, Benworth contracted with Womply for assistance in preparing
applications (e.g., loan packaging, loan referrals, background checks and underwriting).
Benworth and Womply signed an agreement in February 2021. But in April 2021 and by
taking advantage of its superior bargaining position, Womply changed the terms of the
agreement and masked the lender service provider (“LSP”) relationship the companies enjoyed.
The most current terms of the relationship between Benworth and Womply were set forth in the
amended agreement, dated April 14, 2021. The agreement is divided into three parts: (1) the
Amended and Restated PPP Loan Referral Agreement; (2) the Womply Developer Order Form;
and (3) the Womply Master Developer Agreement (collectively, the “Womply Agreements”).
The Amended and Restated PPP Loan Referral Agreement states that Benworth was to
pay Womply a “Referral Fee” of 1% of each PPP loan Womply referred to Benworth. In
addition, the Womply Developer Order Form called for Benworth to pay Womply an “API Fee”
of $250.00 for each funded PPP loan Womply referred to Benworth, and a tier-based
“Technology Fee” that could be as much as 80% of the lender processing fees Benworth
received from the SBA for PPP loans.
2
For clarity, items 4(d), 4(e) and 4(f) are our responses to your questions concerning net operating
income, total operating expenses and operating expenses as a percentage of total revenues.
3
This company is a licensed lender/servicer organized under the rules of the Nationwide Multistate
Licensing System (“NMLS”) and the laws of the Commonwealth of Puerto Rico.
4
D(6)(f) of Chapter 5 of SOP 50 10 6 (p. 185).
2
In total, the Womply Agreements provided that Benworth was to pay Womply more than
90% of the total fee collected. This violates SBA regulations which placed a cap on the fees an
agent could earn from a lender.
Further, the attached emails show that Benworth made no money, and may even owe
Womply money, on 40,563 loans. See emails attached as Exhibit “B.” This exchange shows
Womply’s hard-hearted, callous strategies, putting its business friend in an uncompromising and
untenable situation. And as you know, Womply’s Cory Capoccia obtained a $2,479 PPP loan
through Benworth after earning billions in PPP loan fees. Capoccia’s loan is one example of a
loan where Benworth earned no money. According to Womply’s interpretation of the contract,
Benworth would owe Womply $2.10 after funding Capoccia’s ill-gotten loan. This is outrageous
and disgraceful.
The Interim Final Rule provides, in relevant part, that the “total amount that an agent may
collect from the lender for assistance in preparing an application for a PPP loan (including
referral to the lender) may not exceed” 1% for loans not more than $350,000. Of the more than
300,000 PPP loans that were referred and packaged by Womply to Benworth (which represents
more than two-thirds of all PPP loans funded by Benworth), all were under $350,000.
Benworth thus asks Congress to instruct the SBA to investigate whether Womply may
retain all of the monies in fees already paid by Benworth and whether Womply is entitled to any
additional compensation under these circumstances. Benworth also asks the SBA to investigate
whether Womply’s compensation for services provided to Benworth under the Womply
Agreements are subject to the limits on agent fees set by the Interim Final Rule. These matters
are within the SBA’s jurisdiction. 5
If you have any questions or issues related to this matter, please contact us.
Sincerely yours,
Wifredo A. Ferrer
cc:
Michael E. Hantman (michael.hantman@hklaw.com)
Marcelo Ovejero (marcelo.ovejero@hklaw.com)
5
Section 9 of the Amended and Restated PPP Loan Referral Agreement states that “SBA Regulations”
control the relationship between Benworth and Womply.
3
#180649744_v6
UNAUTHORIZED REVIEW, USE, DISCLOSURE OR DISTRIBUTION IS PROHIBITED. IF YOU ARE NOT THE INTENDED RECIPIENT, PLEASE CONTACT THE SENDER
BY REPLY E-MAIL AND DESTROY ALL COPIES OF THE ORIGINAL MESSAGE.
From:
Sent: Monday, May 10, 2021 8:59 AM
To: 'Toby Scammell' @womply.com>
Cc: 'Cory Capoccia' @womply.com>
Subject: FRAUD ACTION PLAN
SENT VIA EMAIL & CERTIFIED US MAIL
Esteemed Toby:
We hereby regret to inform you that effective immediately Benworth Capital Partners, LLC is not going to continue
with the services provided by your company and will stop funding loans referred by your company because of the
rampant fraud that you have discovered. By means of this letter we request that you cooperate with us in smoothly
transitioning all non‐funded loans to another SBA Lender.
It has become apparent from your communication on Thursday, May 7, 2021 that Womply misrepresented (either
willfully or negligently) its ability to perform as agreed to. Unfortunately, Benworth Capital, as the lender, has not
been privy to your communications with the SBA and the OIG. Therefore, we do not know the gravity of this problem
or if your actions to remedy this problem are enough to minimize liability on our part. Over the last several days, it
has become clear that the services promised by Womply, have not only not been provided, but have also placed our
company in a very bad predicament due to the high likelihood of fraud involved in many of the referred loans from
your company. We relied on the promises and representations made by Womply, as to the validity and legality of
the referred loans, when we entered into the agreement, yet it has become clear with Thursday’s communication
that Womply is unable to perform as agreed to. We find ourselves in a position where we are now exposed to a
dangerous amount of liability as a result, and do not believe that Womply is capable of assuring us that these new,
unproven, last minute procedures will not lead to the potential of even greater liability to both our company, and
the SBA.
Toby, I am no one to tell you how to run your company. However, don’t you think it is common sense to include us,
your lender, in your communication with the SBA and the OIG when this rampant fraud was discovered? Why the
secrecy with your lending partner? We hereby request that you provide us with all your communications with the
SBA which led to the need for your sudden changes in the way referred loans would be screened. We would then
like to have a meeting with you, the SBA and OIG to determine the gravity of this situation and if the actions you are
now taking are sufficient to curtail this problem. If then, and only then, we are assured that these new procedures
are sufficient to curtail the rampant fraud that you are seeing, we may resume processing and funding of loans if we
enter into a shared risk based compensation model.
As a small minority owned firm we felt honored when we were approved by the SBA and US Treasury Department
to be one of the stewards and guardians of the PPP program. We take this charge very seriously and do not want to
do anything that would put this cherished and needed program in peril. As a mission based lender, we felt that
saving the businesses that make the fabric of our country was a once in a lifetime opportunity. As such, it has been
the honor of my career to save over 240,000 businesses.
I look forward to hearing from you and scheduling the meeting with the SBA and OIG.
Respectfully,
3
BWSSCCResp0000036
However, I am very very concerned about these new challenges stated below. We are managing our banking
relationship very closely because they are anxious with the amount of fraud they are seeing. Bluntly stated,
we have been on the brink of being closed 3 times. They have every bank in the US calling Professional Bank
when they see suspicious activity as they initiated the ACHs. It has created a lot of friction. That is why I
respond to every email that even hints at fraud. I have given our bank assurances that we have every protocol
in place to mitigate fraud. Now it seems that may not be the case.
Just yesterday, you sent me an email strongly recommending that we formalize our processes for engaging with
government entities and that we should not be responding without a crystal clear understanding of the facts at
hand. That had we conducted even the most cursory look at the file, we would have had no reason to doubt
our compliance on a loan and especially your processes for that matter. Your 3 minute glance quickly let you
determine that there was nothing to worry about on that loan (even though an SBA official and an OIG employee
thought so) due to the services performed by Womply and the systems in place. You reminded me of a) the
person passing the KYC with no issues (Womply’s being “many times more strict than the program rules
require”), b) driver’s license check, c) selfie, d) database check which looked flawless, and e) when required
borrowers are also requested to pass Lexis Nexis KBA as well. All which we agree should be done on every file,
and which we expect have been done on all files based on the services we were promised when we entered into
an agreement.
To say I was completely surprised by this email sent just 1 day after, would be a huge understatement. You
inform me that you are now working with the SBA and freezing accounts due to fraud. That “early last week we
moved from sampling approved KYC reports on an ad hoc basis to manually reviewing hundreds of thousands
of *approved* KYC reports and manually canceling fraudulent loans.” That you will now be moving to full
manual reviews on 100% of the files with your recently hired KYC specialists. What happened to the systems
you had in place that you were so quick to remind me of yesterday? Are they no longer good enough? Have
the services provided and promised by Womply not as reliable as had been promised therefore requiring
changes? Should we be worried about the 200,000 loans already funded through the use of your company’s
systems?
When the party is over and the lights turn on, we will be the only ones at the party (and it seems standing
naked). THIS IS A LOT OF RISK FOR 10% OF THE FEE FROM THE SBA (20% ‐ Teslar Fee = 10%). What happens if
we lose guarantees from all this fraud? It will take us close to a 100 fees to recover losing 1 guarantee fee.
Toby, these determinations of fraud should have been done much sooner when we were sounding the alarms,
not leave us in a position where we now need to freeze accounts and sign indemnifications. Again, our bank is
on pins and needles leaving us with a lot of exposure and reputational risk. How much liability will we now be
incurring as a result of these proposed indemnification agreements? Let’s say we indemnify the bank and it
turns out that there was no fraud on a file. The program will end by the time this is all sorted out and the
borrower will not be able to apply again. Therefore, the borrower can file suit for damages against the bank and
that bank will have every right to look to us to pay the damages. What other liability will we be taking on and
what additional damages will we be incurring as a result of these indemnifications? All this for 10% on a file?
Since we, as Lender, are expected to take on the liability of these loans, we kindly ask that you include us in your
communications with the SBA, especially communications that would lead to the actions you believed were the
right call under the circumstances. We further need to know from the SBA what led to these radical changes.
What is there position?
Let me know if you are available to hop on a call tomorrow at 2 pm est
2
BWSSCCResp0000039
Bank account comparison
Etc
Early last week we moved from sampling approved KYC reports on an ad hoc basis to manually reviewing
hundreds of thousands of *approved* KYC reports and manually canceling fraudulent loans.
We’ve been working through those queues, adding additional technical filters, and we hired a full time
dedicated team of KYC specialists aiding in this review and analysis. We expect that nearly 100% of funded
loans going forward will be manually reviewed.
We shared the list of approved but fraudulent loans (some funded, most not) with SBA a few days ago as part of
ongoing discussions we’ve been having regarding the latest threats we’ve been seeing. Last night we conducted
a review of the associated compromised bank accounts and identified significant funds still remaining in the
accounts.
We contacted many of the banks (with help from the SBA) and were able to provide freeze instructions to
Chime, Chase, Greendot, Wells Fargo, and Bank of America. Tomorrow we’ll expand the outreach to banks
with fewer fraudulent loans and stolen accounts.
While we were able to centralize this process today, it will still require lender participation to get these funds
back. The process that we informally agreed with Chime and Greendot is:
1 womply provides banks with instructions on which accounts to freeze
2 lenders sign a general indemnification agreement
3 lenders then request funds back (if need be, after reviewing the loan more closely)
4 banks will return the funds to the lender
5 all parties will separately meet their reporting requirements (as applicable)
On a go-forward basis 1 & 2 above will be flipped and additional fraudulent loans that are identified will be
appended to the existing indemnification agreement.
Tomorrow we’ll get the indemnification agreements and circulate them for your review and consideration. I
intend to continue this process tomorrow for all lenders and banks unless I hear from you that you want me to
not include you.
You are welcome to develop your own process here and we can intro you directly and get out of the way.
Womply is under no obligation to do this going forward and we won’t be able to support separate processes
here unfortunately.
Given the circumstances I believed it was the right call to at least freeze these funds today to give you the time
to make a decision about how to proceed. We froze at least $6.3m in fraudulent funds today, so I hope you’ll
agree this effort was worth it.
Let me know if you’d like to discuss.
Best,
Toby
Toby Scammell
4
BWSSCCResp0000041
Founder & CEO at Womply
LinkedIn
On Thu, May 6 2021 at 8:16 PM, @womply.com> wrote:
HI,
The aging dashboards are below for your review.
Aging in Teslar
m m m m V
Aging from SBA Approved
m m m m V
| VP of Partnerships | Womply | @womply.com
5
BWSSCCResp0000042
Hi I hope you're well. We've been making a ton of changes to keep up with the volume.
Please see the attached update that highlights what our team has been doing to support you and
all of your Borrowers.
Best,
Toby
Toby Scammell
Founder & CEO at Womply
LinkedIn
2
BWSSCCResp0000044
Hi
Here’s a comprehensive update on what we’re doing to minimize errors, fraud, and abuse at each stage
in the PPP application process.
As a reminder, under various SBA IFRs, Borrowers are responsible for their own applications including
understanding the rules that apply to them and providing accurate info and certifications. Lenders are
responsible for doing a good faith review of the info provided by Borrowers, and Lenders are held
harmless for Borrower mistakes or misrepresentations. As a technology provider, Womply is not
responsible for Borrower fraud or Lender failures to conduct their own good faith review.
That said, we aim to implement best in class systems to limit the number of incomplete, inaccurate,
and/or fraudulent applications that make it to Lenders. We are working very hard to collect, organize, and
filter application info as quickly as possible. We’ve developed business processes and analytical models
to reject applications that have issues prior to sending them to Lenders.
We are adapting to new issues, feedback, and data to provide legitimate access to as many under-served
businesses as we can while blocking bad actors. We’ve made significant changes to the Borrower-facing
Fast Lane application and our processes in recent days so we can serve a wider spectrum of
self-employed applicants and prevent application errors upfront. Please read this update carefully and let
me know if you have any questions.
EIDL loan calculations removed
We determined that EIDL loan entry was causing confusion (e.g., with EIDL Advances) and downstream
rejections. By eliminating this, we reduce the burden on Lenders to refinance EIDL loans and also close a
backdoor through which bad actors could request excessive PPP loans. We removed this feature
completely and anyone who desires or is required to use their PPP loan to refinance their EIDL loan must
now apply elsewhere.
PPP loan search
We added a database of every First Draw PPP loan approved prior to March 2021 so that applicants for
Second Draw can correctly identify their loan by name and address. This will minimize errors that come
from inaccurate First Draw PPP Loan Numbers and confusion that may arise between EIDL and PPP
loans. We also added a feature to search by First Draw PPP Loan Number, which we then validate
against the SBA’s API. This allows us to determine the Borrower’s correct First Draw PPP Loan Number
so we can minimize errors on Second Draw applications. The SBA may still reject a Second Draw
application if the tax ID or other details associated with the First Draw loan do not match the Second Draw
application.
Automatic logout
To minimize the chance of session intersections on a shared device, we automatically log inactive
Borrowers out of their sessions.
Screen recording
We use a third-party screen recording tool to capture every Borrower session. We’ve added additional
coverage here to handle more sessions. This is very helpful for auditing application issues and
investigating fraud.
BWSSCCResp0000045
Fraud deterrence
In email communications to applicants, we have been explicit that they should not attempt to commit fraud
through PPP Fast Lane. We want applicants to know we are doing everything we can to detect fraud and
will report any suspicious activity. We expect this will minimize casual fraud.
We’ve also added a screen that every Borrower sees when starting their application. This week we’ve
also displayed this to all Borrowers when logging in.
Stay secure screen
We’ve heard examples of Borrowers sharing their verification codes and verify email links with others. To
discourage this behavior, we have enhanced our communications to Borrowers encouraging them to keep
their info safe. We’re also eliminating any verbal or email requests to Borrowers asking for
information—all info can be collected inside the Borrower’s account.
We ask that Lenders do the same: no one should contact Borrowers asking for info. Borrowers need to
provide information only by logging into Fast Lane and securely uploading it.
We also added this text to the footer of any emails we send notifying a Borrower they have data issues or
info missing:
Do not email, text, fax, fedex, or chat your tax documents to us. Womply will never ask you to
provide documents without logging in yourself. Never share your Womply verification code with
anyone or allow another person to access your application for any reason.
Edits & fix-it uploads
Borrowers can now review and fix their own mistakes after they submit their application data to Womply
but before we send that info to Lenders. For example, we’ve seen a ~1% typo rate on key fields such as
Social Security Number. We require the Borrower to enter their own Social Security Number, as an
additional verification measure, but if that manually entered number does not match what we’ve
electronically pulled from their tax documents, the application won’t pass our matching check, and the
borrower will be asked to correct the entry.
Improved cancellation ability
We’ve added the ability for Borrowers to cancel their applications prior to submission to a Lender. This
allows Borrowers to eliminate duplicate applications and to exit before they attempt to commit fraud. We
are working to allow Borrowers to cancel their applications even after submission to a Lender.
Corrections
We have made tens of thousands of corrections to inaccurate application data to improve the accuracy of
Borrower applications submitted to Lenders. For example, if a Borrower reports they had income on both
a Schedule C and a Schedule F from the same tax year, but they only upload a valid Schedule C, our
system lowers the requested loan amount to the value supported by their documentation. In all cases,
Borrowers still have to review and sign their applications.
BWSSCCResp0000046
After reviewing data from the last 30 days, we’re implementing more proactive correction logic to further
reduce errors from Borrower-entered data. Our new process will completely ignore Borrowers’
manually-entered Gross Income values for Schedules C and F from 2019 and 2020, and only use the
data pulled from the tax documents they provide to determine the Gross Income amount, form type, and
year. This should further reduce errors and attempted fraud by Borrowers.
We will also apply this expanded correction logic to all loans that haven’t been submitted to the SBA yet,
as well as to SBA loans that have received a Hold Code by the SBA. This will result in the voiding of
some DocuSigns and a requirement for some borrowers to resubmit applications. In rare cases, it may
also result in cancellations. We believe Borrower miscalculations are a major source of SBA rejections,
and our software can make calculations more accurately than Borrowers can. Corrections to Borrower
calculations must be reviewed and approved by the Borrower before the change is incorporated into the
application.
Here are key fields that appear on the 2483-C and 2483-SD-C application and where those fields come
from:
Field Sources What appears on Womply Corrections
application Applied
● Name ● Borrower entered Borrower-entered in No, basic SBA API
● DBA or in Fast Lane Fast Lane rules validation only
Tradename ● Available on tax (e.g. character length,
● Business docs no PO Boxes, etc)
Address ● Sometimes
● SSN available from bank
● Email
● Phone
Year of Establishment ● Borrower entered Borrower-entered in No, but the year must
in Fast Lane Fast Lane be from 1920 to 2020.
● Could be inferred
from tax documents
Gross Income ● Borrower entered Tax document(s) Yes, but we only use
in at least one field (Line 7 the data from the
or Line 9 from Schedule C correct line on the
or F) Schedule(s)
● Tax documents
Tax year used for ● Borrower entered Tax document(s) Yes, but we only use
gross income in Fast Lane the data from the
● Tax documents supporting
Schedule(s)
Entity type ● Borrower entered Borrower-entered in No
in Fast Lane Fast Lane
BWSSCCResp0000047
Number of employees ● Borrower entered 1 No (Fast Lane is only
in Fast Lane for businesses without
employees)
NAICS ● Borrower-entered Borrower-entered in No
in Fast Lane Fast Lane
● May appear on tax
documents (but often it
won’t match)
Loan request amount ● Womply-calculated Womply-calculated n/a
amount based on Gross amount based on
Income and NAICS Gross Income,
NAICS, and SBA
formula
Certifications ● Borrower entered Borrowers certify to No
in Fast Lane the requirements on
● Borrower certified their application when
via DocuSign they review and sign
their SBA application
via DocuSign
Demographics ● Borrower entered Borrower-entered in No
in Fast Lane Fast Lane
In business on Feb ● Borrower Borrower certification No
15, 2020 certification
● Borrower provides
bank connection and/or
bank statement from Feb
15 2020
First Draw Loan ● Borrower searches Either the SBA loan Yes - if the Borrower
Number SBA database and/or number from the selects their First Draw
● Borrower enters database or the Loan based on Name
enters loan number verified loan number & Address, then we
from SBA API lookup the SBA loan
number and apply that
for them. However we
don’t overrule their
selection of the correct
If they enter their loan
number, then we
validate it with SBA. If
we can’t find their SBA
loan number we don’t
let them submit their
BWSSCCResp0000048
Second Draw
application.
Cancelled & Pending Cancelled
So far, more than half of all applications submitted to Womply have been automatically cancelled, or have
required a fix by the Borrower and/or further analysis by Womply before they are passed onto a Lender.
Specifically, more than 50k Fast Lane applications have been rejected for failing to meet our internal Fast
Lane eligibility criteria, or for having uncorrected errors. Currently there are more than 55k Fast Lane
applications into a “Pending Cancelled” state. These applications will be cancelled unless the flagged
problems are corrected by Borrowers.
In rare cases (<0.1%) such as when suspected fraud is reported to Womply, we’ve canceled loans after a
Lender has reviewed the loan or the loan has been approved by SBA.
Encouraging fraud reporting
We are actively encouraging Borrowers to report suspected fraud to the SBA’s hotline. Recently we added
the following text to most of our emails, our live chat feature, and our FAQ.
If you suspect fraud related to the Paycheck Protection Program or any other small business
relief program, we encourage you to report it to the SBA.
Exceeding our fraud reporting obligations
When we suspect fraud at any stage, we report it to the SBA. We are developing a process to scale this
effort and provide the best data possible to the government. Our reporting is not a substitute for Lender
reporting to SBA and, in general, we will keep this reporting separate. We may become aware of fraud
that Lenders don’t see, and vice versa.
Furthermore, after looking at 1m+ documents and having many discussions with high-ranking officials at
the SBA, we have decided to proactively cancel any deals that we strongly believe are fraudulent—even if
they have already been SBA Approved.
Identity verification
Until today, April 8th, all Borrowers were required to passed through DocuSign ID Check before signing
their PPP application. This has been our primary tool for collecting KYC data in PPP Fast Lane via
LexisNexis. We were recently notified of approximately 20 cases of possible identity theft by DocuSign
(less than 0.1% of signed DocuSigns).
On April 8, Womply is launching an enhanced identity data collection process that will include:
● Public database checks
● Government ID authentication
● Video selfies that match identity to the government ID
● Sanctions and watchlist report
BWSSCCResp0000049
This process will replace Docusign ID Check for all new applications starting tomorrow, April 9 th, and will
be phased in over three days for in-process applications that have been sent for signature where
applicants have not completed Docusign ID Check successfully.
These changes will increase legitimate access to the PPP program while improving the quality of fraud
detection and auditing that’s available for each application. We also expect this to speed up the signing
process significantly, allowing for a faster application process.
Tax Documents
In the last 30 days alone, we have processed more than 1.6 million tax and bank documents. Each day
we are receiving and organizing tens of thousands of new documents. With more data and feedback
(including from Lenders—thank you) we have continually refined our processes for reviewing documents.
These changes are designed to balance the interests of increasing PPP loan access while also
minimizing document fraud.
PPP has been successful in large part due to flexibility in the law and the rules, in an effort to get loans
into the hands of as many businesses as possible, as quickly as possible. But this flexibility has
downsides, including the ability to apply for a PPP loan with only a Schedule C or Schedule F, and to
include either filed (for 2019 or 2020) or draft (for 2020) documents, which leaves significant room for
applicants to falsify documents. We have a good faith belief that the SBA, working together with the
lender and technology service provider community, will identify and punish such fraudulent conduct. But
at the application stage, unfortunately, there is no complete means to flag falsified documents. For
example, there is no IRS API available to verify the numbers on any tax filings (let alone on an applicant’s
Schedule C or Schedule F). Even so, we are working hard to identify and prevent these issues from
infiltrating the program.
Instant classification
Since March 14, we’ve been conducting real-time evaluations of 100% of the tax documents uploaded
during our PPP Fast Lane application flow. This provides a first pass to determine if the forms look
legitimate. We use a machine-learning platform to detect the type of document uploaded (e.g. Schedule
type, year) and to provide the Borrower with feedback about whether they provided the correct forms.
This significantly reduces error rates upfront and acts as our first fraud check. Applications that don’t pass
this instant classification are unlikely to pass through to a Lender without correction from the Borrower.
Second tax document review
100% of tax and bank documents uploaded in the application process go out for third party classification,
verification, and data extraction. The extracted data goes through mathematical checks to determine if the
values and calculations on the forms would be permissible for submission under IRS rules. In all cases, a
human reviews the documents and confirms the OCR extraction is correct. We match the extracted tax
IDs to the application to ensure the form matches the applicant. We have seen an extremely low error
rate on this process (under 1%), which is significantly below the error rate we’ve seen from human-only
reviews. In cases where math errors or other problems are significant, the document is flagged as
suspicious.
Third tax document review
All documents flagged as suspicious by our second tax review undergo a third automated fraud review.
BWSSCCResp0000050
In addition, of the documents not flagged as suspicious by our third-party review, we sample about 1 in 3
documents for a third tax document review. This review involves a variety of checks to detect if the
document has been photoshopped or shows other evidence of tampering.
Final tax document review
In cases where our secondary or tertiary review suggests the document is fraudulent, we perform another
human review. Ultimately, more than half of documents flagged for this final review are deemed to be not
fraudulent, despite the multiple checks and flags. This suggests to us that our filtering continues to be
quite strict. But it also highlights that, without a way to definitively confirm the data on the tax documents
(e.g., with an IRS API or Transcript), we are unable to distinguish between a well-executed fake
document and a real one. Visually, they will look identical. Nonetheless, to avoid program paralysis
based on the mere possibility of fraud, our process considers documents that pass through all of these
fraud checks acceptable.
Network effects from scale
While we continue to evaluate each application in isolation, we are able to apply learnings from every
document we review. The more documents we collect the smarter our models become at classification,
extraction, and fraud detection.
Verified bank accounts
This week we are adding more restrictions around bank accounts to minimize risks of payments going to
the wrong account and to cut fraud.
We have two methods of verifying a bank account. First, a Borrower can connect their bank account
instantly and then provide the account and routing number where they want their money deposited.
Second, we allow Borrowers to upload a voided check, bank statement, ID, and to enter their account and
routing numbers. Once we extract and compare the data provided by the Borrower, we determine their
bank account is verified and bind it to their application. Once verified, bank accounts can’t be changed
until we receive notification of a funding failure.
ACH reject handling
After a failed payment, we will require the Borrower to re-verify their bank account and apply more logic to
ensure the account is theirs. We are seeing ACH rejects happen due to name mismatches and also
receiving institutions that reject payments due to their own fraud flags (e.g., abnormal deposit rules).
ACH limits
We have implemented logic to prevent too many deposits from going to a single bank account (across all
Fast Lane applications regardless of Lender). It is common to see multiple applications using a single
bank account (e.g., husband and wife). By itself, that is not a reason to stop a payment. With multiple
draws possible there are many scenarios that we need to account for in our logic, which is continuing to
evolve. At the moment, we are limiting the maximum number of applications that can be disbursed to a
single bank account to four. And we are limiting the maximum number of tax IDs that can be used with a
single bank account to two.
BWSSCCResp0000051
Institution blocking
We are considering implementing restrictions on receiving depository financial institutions to prevent ACH
rejects. This is a difficult issue because the population we’re trying to serve with Fast Lane is more likely
to be under-banked and they may not have another bank account or the ability to open one.
Conclusion
Together with our lender partners, Womply is on track to help more businesses access PPP loans than
any other company in America. Even though Womply is not a Lender, we are committed to the
responsible administration of the PPP—including maximizing access while mitigating and detecting errors
and fraud. We appreciate your partnership and shared commitment to these goals.
If you have feedback or input that you would like to share with us to improve access, reduce fraud, or help
you perform your roles better, please let us know.
Best,
Toby
BWSSCCResp0000052
SMALL BUSINESS ADMINISTRATION
WASHINGTON, DC 20416
09/01/2022
VIA FORGIVENESS PLATFORM
Harvest Small Business Finance, LLC
Re: PAYCHECK PROTECTION PROGRAM FINAL SBA LOAN REVIEW DECISION
Borrower: OTO ANALYTICS, INC.
SBA Loan No.: 4959988403
Approved Loan Amount: $1,999,997.00
Loan Approval Date: 02/07/2021
Lender Forgiveness Decision Submission Date: 09/13/2021
Lender Forgiveness Decision Amount: $1,999,997.00
SBA Final Forgiveness Amount: $ 0.00
Dear:
The U.S. Small Business Administration (SBA) has completed its review of the above-
referenced Paycheck Protection Program (PPP) loan. Based on a review of lender and/
or borrower submissions, and consideration of the facts and circumstances, SBA has
made a final SBA loan review decision.
SBA has determined that the borrower was ineligible for the PPP loan. The
reason(s) for SBA’s decision is as follows:
The SBA concludes that the Borrower’s previously received First Draw PPP
loan was determined to be ineligible, therefore the Borrower’s Second Draw
PPP loan is ineligible.
Based on the above stated reason(s), SBA has determined that forgiveness in the
amount of $0.00 is appropriate. Additional details regarding the forgiveness payment
amount (if any) will be provided in a Notice of Paycheck Protection Program
Forgiveness Payment.
Within 5 business days of the date of this letter, you must provide a copy of this final
SBA loan review decision to the borrower.
You must continue to service the loan. You must notify the borrower that the
remaining balance of the loan after application of the forgiveness payment (if any)
must be repaid on or before the maturity date. The notification must include the date
on which the first principal and interest payment is due and the amount of the
borrower’s regular payment. As set forth below, if the borrower files a timely appeal
with SBA’s Office of Hearings and Appeals (OHA), the deferment period of the loan will
be extended pursuant to 13 CFR § 134.1211.
Pursuant to 13 CFR § 134.1201(b), the borrower has the right to appeal to SBA’s Office
of Hearings and Appeals a final SBA loan review decision that the borrower:
1. was ineligible for a PPP loan;
2. was ineligible for the PPP loan amount received or used the PPP loan proceeds
for unauthorized uses;
3. is ineligible for PPP loan forgiveness in the amount determined by the lender in
its full approval or partial approval decision issued to SBA; and/or
4. is ineligible for PPP loan forgiveness in any amount when the lender has issued a
full denial decision to SBA.
Any appeal must be made in accordance with the SBA Rules of Practice for Borrower
Appeals of Final SBA Loan Review Decisions Under the Paycheck Protection Program,
located at 13 CFR § 134.1201, et seq., including but not limited to the following:
• An appeal petition must be filed with SBA’s Office of Hearings and Appeals (OHA)
within 30 calendar days after the borrower’s receipt of the final SBA loan review
decision. 13 CFR § 134.1202(a). To file and manage an appeal of a final SBA loan
review decision with OHA, refer to Office of Hearings and Appeals.
• Borrower must include, among other things, a copy of this final SBA loan review
decision with its appeal. 13 CFR § 134.1204(a).
• Borrower must provide you (the lender) with a copy of the timely appeal petition
filed with OHA so that you can extend the deferment period of the loan. 13 CFR §
134.1202(b).
• An appeal to OHA is an administrative remedy that must be exhausted before
judicial review of a final SBA loan review decision may be sought in a federal
district court. 13 CFR § 134.1201(d).
Thank you for your cooperation.
Sincerely,
Office of Capital Access
U.S. Small Business Administration
SMALL BUSINESS ADMINISTRATION
WASHINGTON, DC 20416
09/01/2022
VIA FORGIVENESS PLATFORM
Harvest Small Business Finance, LLC
Re: PAYCHECK PROTECTION PROGRAM FINAL SBA LOAN REVIEW DECISION
Borrower: OTO ANALYTICS, INC.
SBA Loan No.: 5187557106
Approved Loan Amount: $3,103,440.00
Loan Approval Date: 04/13/2020
Lender Forgiveness Decision Submission Date: 09/01/2021
Lender Forgiveness Decision Amount: $3,103,440.00
SBA Final Forgiveness Amount: $ 0.00
Dear:
The U.S. Small Business Administration (SBA) has completed its review of the above-
referenced Paycheck Protection Program (PPP) loan. Based on a review of lender and/
or borrower submissions, and consideration of the facts and circumstances, SBA has
made a final SBA loan review decision.
SBA has determined that the borrower was ineligible for the PPP loan
amount. The reason(s) for SBA’s decision is as follows:
After a review of the forgiveness submission, the SBA concludes that the
documentation provided is insufficient to support forgiveness.
Multiple requests were made for documentation to determine eligibility and
not all requested information were provided. Copy of the Social Security
card and a detailed payroll report for the covered period (May 15, 2020-
October 30, 2020) have not been submitted. Submitted document covers a
portion of the covered period. Without the requested documents, the SBA is
unable to make an eligibility determination.
Based on the above stated reason(s), SBA has determined that forgiveness in the
amount of $0.00 is appropriate. Additional details regarding the forgiveness payment
amount (if any) will be provided in a Notice of Paycheck Protection Program
Forgiveness Payment.
Within 5 business days of the date of this letter, you must provide a copy of this final
SBA loan review decision to the borrower.
You must continue to service the loan. You must notify the borrower that the
remaining balance of the loan after application of the forgiveness payment (if any)
must be repaid on or before the maturity date. The notification must include the date
on which the first principal and interest payment is due and the amount of the
borrower’s regular payment. As set forth below, if the borrower files a timely appeal
with SBA’s Office of Hearings and Appeals (OHA), the deferment period of the loan will
be extended pursuant to 13 CFR § 134.1211.
Pursuant to 13 CFR § 134.1201(b), the borrower has the right to appeal to SBA’s Office
of Hearings and Appeals a final SBA loan review decision that the borrower:
1. was ineligible for a PPP loan;
2. was ineligible for the PPP loan amount received or used the PPP loan proceeds
for unauthorized uses;
3. is ineligible for PPP loan forgiveness in the amount determined by the lender in
its full approval or partial approval decision issued to SBA; and/or
4. is ineligible for PPP loan forgiveness in any amount when the lender has issued a
full denial decision to SBA.
Any appeal must be made in accordance with the SBA Rules of Practice for Borrower
Appeals of Final SBA Loan Review Decisions Under the Paycheck Protection Program,
located at 13 CFR § 134.1201, et seq., including but not limited to the following:
• An appeal petition must be filed with SBA’s Office of Hearings and Appeals (OHA)
within 30 calendar days after the borrower’s receipt of the final SBA loan review
decision. 13 CFR § 134.1202(a). To file and manage an appeal of a final SBA loan
review decision with OHA, refer to Office of Hearings and Appeals.
• Borrower must include, among other things, a copy of this final SBA loan review
decision with its appeal. 13 CFR § 134.1204(a).
• Borrower must provide you (the lender) with a copy of the timely appeal petition
filed with OHA so that you can extend the deferment period of the loan. 13 CFR §
134.1202(b).
• An appeal to OHA is an administrative remedy that must be exhausted before
judicial review of a final SBA loan review decision may be sought in a federal
district court. 13 CFR § 134.1201(d).
Thank you for your cooperation.
Sincerely,
Office of Capital Access
U.S. Small Business Administration
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