WASHINGTON, DC December 7, 2020 – New report from the Kansas City Star reveals that a taxpayer-backed Main Street Lending Program (MSLP) $ 9 million loan was given to a Kansas-based garbage collection company that claims to have only three drivers and was recently checked by a convicted fiscal criminal. Warren LC – whose management transferred from Thomas Fritzel to his wife sometime after May 2019 – was approved for the loan just three weeks before Mr. Fritzel checked into a South Dakota federal prison for tax evasion . See additional loan details HERE of the Accountable.US government watchdog.
To date, the MSLP – the severely underutilized $ 600 billion CARES Act program that Treasury Secretary Mnuchin abruptly has announcement Drawn to a close on Dec. 31 despite billions of remaining funds available and the ongoing recession – only funded a total of 522 loans with a face value of around $ 5.2 billion. The program aims to provide taxpayer-guaranteed loans to small and medium-sized businesses struggling with the COVID-19 pandemic. Yet somehow one of the few beneficiaries was a company recently controlled by a convicted felon who is currently in federal prison for tax evasion.
The MSLP’s List of Banned Borrowers, based on the US Small Business Administration Criteria– includes companies owned or significantly controlled by anyone charged with a crime or imprisoned. Given Warren LC’s ongoing ties to a criminal who exploited the tax system for personal gain, this raises serious questions about the federal oversight under this program, if any.
There has already been at least $ 3 billion dollars of waste, fraud and abuse uncovered in the SBA’s Paycheck Protection Program (PPP) due to the Trump administration’s mismanagement and design. This new report raises the question of whether the Trump Treasury and Federal Reserve MSLP has suffered the same kinds of problems that come with a lack of accountability and transparency.
In addition to Warren LC, just last month, Wellshire Financial Services, which is part of a multi-state securities lending firm run by Trump’s top donor Rod Aycox, received a $ 25 million loan with an interest rate of 3.15% – while the loans that the company grants to consumers can reach 350%. annually. Confronted with the loan at a congressional hearing last week, Treasury Secretary Steven Mnuchin admitted that Wellshire’s loan was likely “not the spirit and the intentionFrom the MSLP.
“This money was intended to help Main Street businesses stay above water during the pandemic, not to help those at the heart of tax evasion problems. But instead of reforming the program, the Trump team is shutting it down despite the next administration ”, noted Derek martin, government watchdog spokesperson Responsible.US. “This crisis calls for responsible leadership, and that means letting the Biden administration reform and fix this economic lifeline instead of denying aid to legitimately struggling companies.”
Accountable.US is a non-partisan watchdog group that exposes corruption at all levels of government