Victim of COVID-relief business loan fraud out of country, unable to prove innocence

TAMPA, Fla. (WFLA) — During the pandemic, government money was flowing.

Billions were handed out by the Small Business Administration through loans to help businesses pay employees and stay open.

Rick Martinez is a veteran from Tampa and is staying with family in France until early next year. He didn’t apply for one of these loans, but now out of the blue and years later, the government sent him a letter saying if he doesn’t pay back more than $20,000, they’re going to start taking some of his Social Security payments.

“They didn’t do their work on the front end, and now they’re not willing to any work on the back end either,” Martinez said. “They created this environment and appears a lot of retirees are getting slammed with this. They’re going after old people to pay for their mistake.”

A growing number of people are on the hook for small business loans they never applied for and don’t even qualify for.

Dawn Forest of Venice, Florida, and Joseph Carpenter of Pinellas County received similar letters.

The COVID-era loans were issued years ago, and now fraud victims find themselves having to prove they didn’t receive the money.

Forest is the latest to call Better Call Behnken about a loan the Small Business Administration (SBA) said she owes. The government claims she took out a $20,833 loan in 2022. Yet she said she wasn’t notified until June 2024 that the loan even existed.

“I was literally shaking, going what is this?” she said. “I never took out a loan, and I’m not a small business so how could they approve it?”

Forest said she can’t reach anyone within SBA to help.

“I got one person who said they couldn’t help me,” she said. “It wasn’t their department, just keep communicating through secure email, even after I told them no one ever answers the emails.”

Consumer Investigator Shannon Behnken has been investigating the same situation for Joseph Carpenter, a veteran in Pinellas County.

The SBA also sent him a letter in June claiming he owes the same amount as Forest, $20,833, and that if he didn’t pay up by September, the U.S. Treasury Department would start taking up to 15 percent of his social security payments.

Better Call Behnken was able to help Carpenter get the government to agree to keep their hands off his Social Security while they investigate his fraud claim.

But since his story, numerous others called in about their own nearly identical letters. Not only do they say they didn’t apply for the loan, none of them would have qualified. Even so, they are all being asked to prove he didn’t get the money.

The fraud victims say they’re uncomfortable sending the information the SBA is asking for, which includes tax forms dating back to 2019, a police report, three years of tax returns, IRS verification, a copy of their driver’s licenses, and a “selfie” of them holding their driver’s license.

After two weeks, the SBA finally responded to questions from Better Call Behnken. However, there was no answer as to why these loans were given to people who don’t own businesses or why they have to hand over this invasive information.

Instead, we were sent this:

“While the SBA cannot comment on pending legal matters, you may review our FOIA page for more information .

If individuals suspect they are victims of identity theft, it’s crucial they report it to the SBA immediately. By doing so, we can work together to verify the occurrence and ensure that any fraudulent loans are disassociated from the victim’s account.

We strongly encourage everyone to stay vigilant during this time, as scammers have targeted the PPP and COVID-EIDL programs with phishing attempts. For tips on protection from these scams and for reporting Identity Theft, please review the following resources:

• https://www.sba.gov/reporting-identity-theft
• https://www.sba.gov/stay-safe-tips

Our mission is to provide exceptional customer service. We take all identity theft claims very seriously. SBA’s customer service team will be reaching out to those affected to discuss the next steps.”

For the latest news, weather, sports, and streaming video, head to WFLA.