IP Addresses From China, Russia, Iran, and Cuba Got COVID Small Business Loans

According to the Small Business Administration’s Office of the Inspector General, millions of applications for COVID business loans came from foreign IP addresses in countries including Russia, Pakistan, Mexico, Afghanistan, and China.

A report released on September 12 by Inspector General Hannibal Ware found the Small Business Administration received applications for COVID Economic Injury Disaster Loans (EIDL) from millions of foreign IP addresses and while most of the applications were rejected, tens of thousands of loans were disbursed.

Economic Injury Disaster Loans were designed to provide relief to American small businesses that suffered hardship as a result of the government’s pandemic response. And while the Small Business Administration put in place layers of controls to prevent abuse by foreign countries, the IG found that individuals using foreign IP addresses were able to access the application system.

The IG reviewed 233,000 applications from March 20, 2020, to November 12, 2021, and found the SBA “approved and disbursed 41,638 COVID-19 EIDLs, advances, and grants for $1.3 billion” to foreign IP addresses.

Among those, applications submitted from IP addresses in Iran, Syria, and Cuba received tens of thousands in EIDLs. All three countries are designated state sponsors of terrorism by the US State Department. Nearly $166,000 in taxpayer funds went to Iran. Syria received $23,500. And Cuba received $276,000.

Then there were the countries that received millions.

Pakistan got $47.2 million. Afghanistan received $1.58 million. China received $1.58 million. And $4 million went to Russia. Mexico alone accounted for $157.8 million in COVID relief money while Canada and India raked in $183.3 million and $143.7 million respectively. Both the United Arab Emirates (10.6 million) and Saudi Arabia ($2 million) benefited as well.

The Inspector General concluded that the applications submitted from foreign IP addresses indicated “potential fraud that may involve international criminal organization.”

Small Business Administration associate administrator of the Office of Capital Access, Patrick Kelley, dismissed the report noting that the $1.3 billion in taxpayer money represents less than .04 percent of the $342 billion in advances and loans approved by the SBA.