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SBA Office of Inspector General Releases Semi-Annual Report

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SBA Office of Inspector General Releases Semi-Annual Report

Protect Law Group is committed to resolving your SBA loan default problems.  Our experienced attorneys can help you through the SBA loan default process with an SBA offer in compromise, administrative wage garnishment defense, or other SBA loan forgiveness processes.

The Office of Inspector General (OIG) provides independent, objective oversight to improve the integrity, accountability, and performance of SBA and its programs. The SBA deals with  challenges in carrying out its mission. Challenges include fraudulent schemes affecting all SBA programs, significant losses from SBA loan defaults, procurement flaws that allow large firms to obtain small business awards, excessive improper payments, and outdated legacy information systems.

The Semi-Annual Report identified several incidences of borrower fraud or other malfeasance that resulted in criminal or other punitive actions.  SBA borrowers should take note and refrain from similar activities as it may result in criminal charges and eliminate any chance of an SBA offer in compromise. Download a copy of the Semi-Annual Report here: sar_fall_2016_publication_draft_-_508-1

  • A business owner made a cash payment to a bank employee and submitted false tax returns to obtain an SBA business loan.
  • A company falsely represented and certified that it was a small business in order to compete for and obtain Federal small business set-aside contracts.
  • Individuals conspired to obtain a $2 million SBA-guaranteed loan by concealing the borrower’s extensive criminal history.
  • An individual prepared false financial statements in order to obtain over $4.86 million in SBA loans to refinance his failing businesses.
  • Individuals made false statements to a bank and SBA in order to secure an SBA economic injury disaster loan.
  • Individual assisted in preparing false tax returns which were used to fraudulently obtain SBA and non-SBA loans.
  • Individual submitted false information and documents to SBA in support of his disaster loan application. Proceeds of the loan were misused by paying for personal expenses, including a wedding in Cancun, Mexico.

 If you are facing an SBA loan default, contact us at 1-888-756-9969 for a consultation.

Why Hire Us to Help You with Your Treasury or SBA Debt Problems?

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Millions of Dollars in SBA Debts Resolved via Offer in Compromise and Negotiated Repayment Agreements without our Clients filing for Bankruptcy or Facing Home Foreclosure

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Millions of Dollars in Treasury Debts Defended Against via AWG Hearings, Treasury Offset Program Resolution, Cross-servicing Disputes, Private Collection Agency Representation, Compromise Offers and Negotiated Repayment Agreements

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Our Attorneys are Authorized by the Agency Practice Act to Represent Federal Debtors Nationwide before the SBA, The SBA Office of Hearings and Appeals, the Treasury Department, and the Bureau of Fiscal Service.

$150,000 SBA COVID EIDL - OFFER IN COMPROMISE & RELEASE OF COLLATERAL

$150,000 SBA COVID EIDL - OFFER IN COMPROMISE & RELEASE OF COLLATERAL

Our firm successfully facilitated the SBA settlement of a COVID-19 Economic Injury Disaster Loan (EIDL) where borrower received an SBA disaster loan of $150,000, but due to the severe economic impact of the COVID-19 pandemic, the business was unable to recover.

Despite the borrower’s efforts to maintain operations, shutdowns and restrictions significantly reduced the customer base and revenue, making continued operations unsustainable. After a thorough business closure review, we negotiated with the SBA, securing a resolution where the borrower paid only $6,015 to release the collateral, with no further financial liability for the owner/officer.

This case demonstrates how businesses affected by the pandemic can navigate SBA loan settlements effectively. If your business is struggling with an SBA EIDL loan, we specialize in SBA Offer in Compromise (SBA OIC) solutions to help close outstanding debts while minimizing financial burden.

$391,000 SBA COVID EIDL - CROSS-SERVICING DISPUTE | NEGOTIATED REINSTATEMENT & WORKOUT

$391,000 SBA COVID EIDL - CROSS-SERVICING DISPUTE | NEGOTIATED REINSTATEMENT & WORKOUT

Client's small business obtained an SBA COVID EIDL for $301,000 pledging collateral by executing the Note, Unconditional Guarantee and Security Agreement.  The business defaulted on the loan and the SBA CESC called the Note and Guarantee, accelerated the principal balance due, accrued interest and retracted the 30-year term schedule.  

The loan was transferred to the Treasury's Bureau of Fiscal Service which resulted in the statutory addition of $90,000+ in administrative fees, costs, penalties and interest with the total debt now at $391.000+. Treasury also initiated a Treasury Offset Program (TOP) levy against the client's federal contractor payments for the full amount each month - intercepting all of its revenue and pushing the business to the brink of bankruptcy.

The Firm was hired to investigate and find an alternate solution to the bankruptcy option.  After submitting formal production requests for all government records, it was discovered that the SBA failed to send the required Official 60-Day Pre-Referral Notice to the borrower and guarantor prior to referring the debt to Treasury. This procedural due process violation served as the basis to submit a Cross-Servicing Dispute to recall the debt from Treasury back to the SBA and to negotiate a reinstatement of the original 30-year maturity date, a modified workout, cessation of the TOP levy against the federal contractor payments and removal of the $90,000+ Treasury-based collection fees, interest and penalties.

$383,000 SBA 7A LOAN - NEGOTIATED RELEASE OF LIEN FOR CONSIDERATION

$383,000 SBA 7A LOAN - NEGOTIATED RELEASE OF LIEN FOR CONSIDERATION

Clients executed several trust deeds pledging seven (7) real estate properties and unconditional personal guarantees for an SBA 7(a) loan from the participating lender. The clients' small business failed and eventually defaulted on repayment of the loan exposing all collateral pledged by the clients. The SBA subsequently acquired the loan balance from the lender, including the right to liquidate  and collect all pledged collateral pursuant to the trust deed instruments.

The Firm was hired to negotiate separate release of lien proposals for all 7 real estate properties. In preparation for the work assignment, the Firm Attorneys initiated discovery  to secure records from the SBA and Treasury's Bureau of Fiscal Service. After reviewing the records and understanding the interplay between the lender and the SBA, the attorneys then prepared, submitted and negotiated the release of lien (ROL) for each of the 7 real estate properties for consideration.

After submitting the proposals, the assigned SBA Loan Specialists approved each ROL package - significantly reducing the total SBA debt claimed.

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