SCOTTSDALE, AZ (3 On Your Side) -- A few months ago, Scott Monroe received a surprise statement in the mail from the U.S. Small Business Administration.

"It was a statement showing there was a disaster loan with payment coming due in August of 2021," Monroe told 3 On Your Side.

It was a surprise because Monroe doesn't own a business and he never applied for the $26,200 loan.

"It is my name," Monroe said. "My middle initial. This address."

The retired Scottsdale man tried to unravel the mess that was suddenly linking his name and home address to a fraudulent SBA loan. He filed reports with local and federal officials. Still, the loan notices kept coming in the mail.

"This loan is not mine and I am not going to pay it," he said.

According to SBA data, 62,005 COVID-19 Economic Injury Disaster Loans worth $3.3 billion have been granted in Arizona. Nationwide, nearly $200 billion in EIDL loans has been approved. Like the loan in Monroe's name, many of them are likely fraudulent.

A scathing federal report released by the Office of the Inspector General in October reveals a series of failures in the loan process.

"SBA's initial response to implement the EIDL program made billions of dollars of capital available to provide prompt economic relief to eligible entities affected by the COVID-19 pandemic," the report stated. "However, the unprecedented demand for COVID-19 EIDLs and equally unprecedented challenges SBA had in responding resulted in billions of dollars being distributed to potentially ineligible entities or fraudsters because of errors, weaknesses in controls, and fraud."

Examples of red flags identified by OIG include multiple loan applications using the same address, email address, or bank account. The report also shows multiple loans were approved for applicants who used the same IP address. In one case, a single IP address was used for 245 loans worth $14.5 million.

In Monroe's case, the fraudsters didn’t even bother to come up with a fake business name. They just used his first and last name as the business name, and now he’s on the hook.

"My identity is on the line out there," he said. "It was such a shot to the gut out of the clear blue like that because I'm always so careful to make sure that I shred everything that leaves this property, so where they got my information, is it on the dark web or whatever, who knows."

But he does know one thing.

"When this comes due, they’re not getting any money out of me," Monroe said.

3 On Your Side reached out to the financial institution where the money from Monroe's fraudulent loan was deposited. A spokesperson said he was not able to comment on the loan because it is part of a government investigation. The SBA did not respond to questions about the loan in Monroe's name, but said anyone who discovers a fraudulent loan in his or her name should immediately report it to the OIG hotline at 1-800-767-0385 or online.

Check our list of small businesses in Arizona who have received a COVID-19 Economic Injury Disaster Loan to see if you may be a victim. (Note: This is a large file.)

 

Copyright 2021 KPHO/KTVK (KPHO Broadcasting Corporation). All rights reserved.

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