WASHINGTON -- Nineteen people were recently arrested by the Department of Justice and charged with fraud in connection with more than $76 million in loans guaranteed by the Small Business Administration.
SBA's Office of Inspector General cracked an apparent "inside job" of loan and banking professionals, centered around individuals in the Business Loan Express, LLC, the agency said. BLX is a major participant in SBA's Preferred Lender Program, the agency said.
SBA is reviewing BLX's loans in order to assess its on-going relationship with SBA. The agency said it would move aggressively to recover any funds lost to fraud.
"Due to the excellent work of SBA's Office of Inspector General, in conjunction with the U.S. Department of Justice and Secret Service, the SBA has broken up what appears to be a major and sophisticated scam to defraud taxpayers, said SBA Administrator Steven Preston.
SBA said it has helped America's small businesses through its guarantee on a portfolio of 345,000 small business loans totaling $62 billion.