JP Morgan fires staff for COVID-19 relief funds fraud
JP Morgan has fired a collection of employees for illegally siphoning money from COVID-19 bailout funds meant for small businesses.
According to Bloomberg sources the major US bank kicked off an investigation into improper conduct by both staff and customers earlier this week.
JP Morgan found that employees had applied for and received money from the Economic Injury Disaster Loan (EIDL) scheme.
EIDL offers grants of up to $10,000, and low interest loans, to companies and small businesses adversely affected by the pandemic.
The Small Business Administration (SBA) issues the grants. JP Morgan found that some of its employees had deposited EIDL funds into their accounts.
The SBA has recently asked banks to investigate suspicious activity related to the EIDL programme, over concerns of fraud.
According to a Financial Times source, the fired employees constitute a “very small” percentage of the suspicious activity discovered by JP Morgan.
The US’s largest bank sent out a memo on Wednesday, seen by Bloomberg. It warned staff that it had discovered instances of employee misconduct over the Paycheck Protection Program (PPP).
PPP is a $669-billion business loan program. It focuses on helping self-employed workers, sole proprietors, and non-profit companies.
It allows entities to apply for low-interest private loans to pay for their payroll and certain other costs.
The loan can be partially or fully forgiven if the business keeps its employee counts and employee wages stable.
Unlike EIDL, PPP loans are handed out by banks. JP Morgan believes that staff may have helped customers gain funds illegally under the scheme.
JP Morgan has arranged $29 billion of loans through the PPP.
“We are doing all we can to identify those instances, and cooperate with law enforcement where appropriate,” the bank’s memo reads.