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EXCLUSIVE U.S. Justice Department probing Kabbage, fintechs over PPP loan calculations -sources

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The U.S. Department of Justice is investigating whether financial technology companies including Atlanta-based Kabbage Inc may have erred while distributing billions of dollars in pandemic aid to struggling small businesses, three people with knowledge of the matter told Reuters.

The investigation, led by the Justice Department’s civil division, is examining whether Kabbage and other fintech companies miscalculated how much aid borrowers were entitled to from the Paycheck Protection Program (PPP) due to confusion over how to account for payroll taxes, the three people said.

A fourth person with direct knowledge of the matter said a number of fintechs were being probed over the PPP tax issues but declined to provide names.

A probe does not necessarily indicate wrongdoing and it was unclear if the investigation will result in penalties against the companies, two of the three sources said.

A spokesperson for the Justice Department declined to comment.

Kabbage Inc., which manages Kabbage’s PPP loans and also goes by the brand K Servicing, did not respond to multiple calls and emails seeking comment. Spokespeople for American Express Co. (AXP.N), which in August bought most of Kabbage’s assets other than its loan portfolio, declined to comment.

The previously unreported probe underscores how the unprecedented $780 billion program, which was launched by the Small Business Administration (SBA) on April 3, 2020, to mitigate the fallout from COVID-19 shutdowns, has created legal and reputational risks for some lenders.

Reuters reported in November that a handful of federal agencies were scrutinizing lenders over a range of PPP issues, including failing to properly vet borrowers’ payroll expense calculations and potentially discriminatory lending policies.

Under the PPP, big banks, community lenders and fintechs have dispensed millions of government-backed loans to small businesses hurt by the pandemic lockdowns. If borrowers spend the money on payroll and other business expenses, the government repays the lender on behalf of the borrower.

While the program has been hailed as a lifeline for small businesses, its launch was rushed and many of its rules were initially unclear. One challenge lenders faced in April 2020 was how to account for federal, state and local taxes when calculating a company’s overall payroll costs, which determined their maximum allowable loan.

Some lenders over-accounted for taxes, potentially inflating loans, while others under-accounted for taxes, potentially denying borrowers aid they were entitled to, the two sources said.

Fintechs have attracted government scrutiny because they processed loans at high speed using software that in some cases had glitches, causing errors in applications, one of the sources said. Other industry sources also said that fintechs’ use of automated lending platforms with few manual checks caused errors to be replicated across thousands of loans.

SBA data showed fintechs have issued around $26.5 billion worth of PPP loans. Kabbage made nearly 300,000 PPP loans worth $7 billion between April 3, 2020, and Aug. 8, 2020, according to its website.

Lenders have said they were under enormous pressure to lend vast sums of money to millions of businesses quickly, while having to keep up with ever-changing PPP rules.

A spokeswoman for the SBA declined to comment.

Our Standards: The Thomson Reuters Trust Principles.

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Kelsey Grammer Cast in Paper Empire TV Show From Robert Gillings – Collider.com

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Kelsey Grammer Cast in Paper Empire TV Show From Robert Gillings  Collider.com

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Download Master (2016) Dual Audio (Hindi-English) 480p [500MB] || 720p [1.5GB]

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✅ Download Master (2016) Movie Dual Audio (Hindi-English)  480p,720p & 1080p. This is a English movie and available in 480p,720p & 1080p qualities. This is one of the best movie based on Action, Crime. Click on the Download links below to proceed👇

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South Korea’s financial crime unit launches a manhunt for a con man involved in a nationwide financial fraud after he absconds with the money and takes on a new identity.

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South Korea’s financial crime unit launches a manhunt for a con man involved in a nationwide financial fraud after he absconds with the money and takes on a new identity.

JIN Hyun-pil heads up a multi-level marketing company called ‘One Network Inc.’ that has an extensive network covering all of Korea. The Intellectual Criminal Investigation’s Chief, KIM Jae-myung, is on to Jin’s company suspecting its deep and widespread connection to CEOs, politicians.

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The rhythm of traditional Korean movies, as always, turned upside down. The policeman acted so badly that he didn’t have any expression.

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The Grand Tour’s Carnage A Trois special has a release date on Amazon Prime Video

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The latest episode in The Grand Tour’s fourth season has finally been given a release date – and a full-length trailer, too.

The trusty trio of Jeremy Clarkson, James May and Richard Hammond will all return to Amazon Prime Video for more vehicular antics on December 17. This time around, they’ll be embarking on a journey from the Welsh hills to the English Channel.

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