Exclusive: U.S. Justice Dept. subpoenas Wall Street banks for small business loans info - sources

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The U.S. Justice Department has sent grand jury subpoenas to big banks seeking records as part of a broader investigation into potential abuse of a $660 billion emergency loan program to help small businesses hurt by the novel coronavirus, two people with knowledge of the matter told Reuters.

FILE PHOTO: The U.S. Department of Justice building is bathed in morning light at sunrise in Washington, U.S., February 14, 2020. REUTERS/Mary F. Calvert

Policymakers worry that the huge pot of cash has been a magnet for fraudsters, and U.S. Treasury Secretary Steven Mnuchin has warned that companies found to have lied to secure loans could face prosecution. The Justice Department opened a probe into the program last month and has already brought criminal charges against borrowers it alleges lied about the state of their businesses and numbers of employees.

A third person with direct knowledge of industry interactions with the Justice Department said the agency wanted to scan banks’ records for possible wrongdoing by borrowers.The first two sources said major banks had received the subpoenas, but did not provide names. Industry data shows JPMorgan Chase & Co, Citigroup Inc, Bank of America Corp and Wells Fargo & Co were among the biggest banks to participate in the program.

In addition, the program still requires banks to conduct anti-money laundering checks which could have tripped some lenders up, said lawyers.

 

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Call me jaded, but I’ve got a feeling none of the charges brought will be against major Trump/GOP donors. And what about due diligence re: the banks? Don’t they have requirements to meet before they give people $$?

looking for ...potential conflicts of interets...or plain corruption? MutualBackScratching

Those banks are businesses too, why not loan them money too?

Beautiful

Wells Fargo hasn't been caught doing anything awful for at least a week. I wonder how much of this money went through them.

Wells Fargo has been caught doing anything awful for at least a week. I wonder how much of this money went through them.

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