FTC Files Case Against RI Firm Allegedly Posing As SBA Lender; Company Claims Error

FTC Files Case Against Firm Posing As SBA Lender

A Rhode Island company is facing allegations of falsely claiming to be an authorized lender for the Small Business Association’s (SBA) Paycheck Protection Program (PPP).

The Federal Trade Commission (FTC) asked a federal judge on Friday (April 17) to order Ponte Investments LLC of West Warwick to stop alleged violations of federal laws, including reputedly posing as an affiliate of the SBA or as an authorized lender.

“In this time of incredible challenge for all Americans, it is disturbing to see these defendants preying on desperate businesses looking for ways to keep their employees financially secure,” FTC Chairman Joseph Simons in a statement announcing the case. “The FTC is on guard, and we will act to protect consumers from scammers looking to take advantage of this crisis.”

The FTC’s complaint, filed in U.S. District Court for the District of Rhode Island, alleged that the company, also doing business as SBA Loan Program and SBA Loan, and its owner John C. Ponte, are marketing themselves to small businesses as an approved lender under PPP. The PPP program is part of the $2.3 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act.

The FTC said the company received a cease and desist letter from the SBA on April 10. However, the agency alleges that as many as thousands of businesses made loan applications to the defendants.

FTC lawyers asked the court to order the company to make “rescission or reformation of contracts, restitution, the refund of monies paid and the disgorgement of [any] ill-gotten monies.” However, an agency spokesman told PYMNTS the complaint doesn’t allege that the company actually collected any fees.

Christopher Mulhearn, a Providence, Rhode Island attorney representing the company, acknowledged that his client made a mistake and is working with the FTC to correct it.

He said Ponte received preliminary approval from the SBA one week ago to be a PPP lender subject to receiving the firm’s audited financial statements.

“In their excitement, they prematurely posted an ad on their website on Friday, April 10 for two hours,” Mulhearn said. “It was an inadvertent mistake.”

“Ponte has heard nothing this week until this afternoon, when he received a copy of the complaint,” he said. “They never charged any money and no one profited off this.”

Mulhearn said the company immediately complied with the SBA’s cease and desist order and took the ad down.


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.