<p><p>As the U.S. government raced to shore up small businesses’ finances at the height of the pandemic, it may have erroneously awarded more than $1.3 billion to foreign applicants – raising new suspicions that the program might have helped fund overseas crime syndicates.</p></p><p><p>The top watchdog for the Small Business Administration, which reported its findings on Monday, said the spending posed a “significant risk of potential fraud.”</p></p><p><p>In doing so, the watchdog underscored the agency’s persistent, costly and well-documented struggles to ensure its vast array of coronavirus aid benefited the cash-strapped firms that needed it the most.</p></p><p><p>The trouble concerned the Economic Injury Disaster Loan Program, or EIDL, an initiative dating to the Trump administration that provided grants and other financial support to struggling small companies.</p></p><p><p>More than 27.8 million applicants ultimately sought funds from the SBA, overwhelming an agency that had been tasked to oversee a vast array of emergency spending that dwarfed its annual budget.</p></p><p><p>Congress required the SBA to disburse its EIDL aid only to those businesses affected by the pandemic and located in the United States or its territories.</p></p><p><p>But a crush of applications from foreign sources still flooded the agency over the life of its program – and the SBA repeatedly appeared to fund them anyway.</p></p><p><p>In total, the SBA made 41,638 awards totaling $1.3 billion to applicants that pursued that aid using computers believed to be located abroad, according to the agency’s inspector general.</p></p><p><p>The watchdog said that some of the applications came from what were deemed “high risk” countries that should have been blocked from filing applications outright.</p></p>
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