Two Fintechs Fueled Extensive Pandemic Relief Fraud

Executives at Womply and Blueacorn, which facilitated millions of Paycheck Protection Program loans, flouted rules and themselves collected improper loans, investigators said.

Top executives from two small start-ups that reaped billions of dollars in fees for facilitating Paycheck Protection Program loans turned a blind eye to extensive fraud among their applicants and appear to have themselves collected large relief loans for which they were ineligible, according to a report released Thursday by Democratic lawmakers.

The 130-page report, the product of an 18-month investigation by the House Select Subcommittee on the Coronavirus Crisis, is packed with startling details about how negligible government oversight and a rush to get cash out the door to help devastated businesses created conditions ripe for fraud. Some non-bank financial technology companies, known as fintechs, exploited those gaps to collect outsize profits — which they maximized by ignoring typical lending safeguards and at times by outright flouting the government aid program’s rules, the report said.

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