WASHINGTON (Reuters) – The U.S. Justice Department has actually sent grand jury subpoenas to big banks seeking records as part of a more comprehensive investigation into possible abuse of a $660 billion emergency loan program to assist small businesses injured by the novel coronavirus, two individuals with knowledge of the matter informed Reuters.
SUBMIT PICTURE: The U.S. Department of Justice building is bathed in morning light at daybreak in Washington, U.S., February 14,2020 REUTERS/Mary F. Calvert
The previously unreported subpoenas issued by the department’s Washington scams division do not necessarily suggest misdeed on the part of the banks, but will intensify growing worries among loan providers that they risk being swept up in a federal crackdown on Paycheck Protection Program fraud.
The program enables small companies injured by the pandemic to use with loan providers for a government-backed loan which can be forgiven supplied a minimum of 75%is invested in payroll expenses.
Policymakers stress that the substantial pot of cash has been a magnet for fraudsters, and U.S. Treasury Secretary Steven Mnuchin has actually cautioned that business discovered to have actually lied to protect loans might deal with prosecution. The Justice Department opened a probe into the program last month and has al