HUBZone program vulnerable to fraud, lawmaker says

The Small Business Administration’s program to develop businesses in underutilized business districts is riddled with holes, leaving it open to fraud, Rep. Nydia Velazquez (D-N.Y.), chairwoman of the House Small Business Committee, said Sept. 19.

Although 14,200 businesses are in the Historically Underutilized Business Zones program, SBA does only 500 examinations annually. Meanwhile, SBA approves 2,000 companies to join the program each year, she said. More astonishing, a preliminary review by the committee found multimillion-dollar homes in areas SBA dubbed HUBZones, she said

“This is not exactly what one would expect for an initiative designed to spur development in low-income areas,” Velazquez said at a committee hearing on abuses in several SBA programs.

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