Justice Department issues subpoenas to big Wall Street banks for small business loans records: Reuters - Creak News

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Justice Department issues subpoenas to big Wall Street banks for small business loans records: Reuters

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FILE PHOTO: The U.S. Department of Justice building is bathed in morning light at sunrise in Washington, U.S., February 14, 2020. REUTERS/Mary F. CalvertReuters

  • The Justice Department issued grand jury subpoenas to Wall Street banks seeking information in relation to a broader investigation into potential abuse of the small business loan program.
  • The program allows small businesses hurt by the pandemic to apply with lenders for a government-backed loan which can be forgiven provided at least 75% is spent on payroll costs.
  • Due to their critical role in processing the loans, banks have reams of information that could point to other fraud.
  • Visit Business Insider's homepage for more stories.

WASHINGTON (Reuters) - The U.S. Justice Department has sent grand jury subpoenas to big banks seeking records as part of a broader investigation into potential abuse of a $660 billion emergency loan program to help small businesses hurt by the novel coronavirus, two people with knowledge of the matter told Reuters.

The previously unreported subpoenas issued by the department's Washington fraud division do not necessarily indicate wrongdoing on the part of the banks, but will compound growing worries among lenders that they risk being swept up in a federal crackdown on Paycheck Protection Program fraud.      

See the rest of the story at Business Insider

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