August 26, 2025

Bob Coleman
Founder & Publisher

SBA Hot Topic Tuesday: SBA Employee Approves Insider Loans, Pleads Guilty to Loan Fraud

On August 12, 2025, the U.S. Attorney’s Office for the Northern District of Georgia announced that Rena Barrett, a former SBA loan officer, pleaded guilty to making false statements in connection with pandemic relief loans. Barrett admitted to abusing her position at the SBA to push through fraudulent applications that resulted in losses exceeding $550,000.

What She Did

Barrett’s misconduct began before her government employment. In May 2021, she submitted an Economic Injury Disaster Loan (EIDL) application for $170,000. The SBA denied it. Just two months later, in July 2021, Barrett was hired as an SBA loan officer. With insider access to the loan portal, she reopened her own denied application and manually approved it, diverting taxpayer-funded relief money to herself.

After securing her own loan, Barrett expanded her scheme. She:

• Approved fraudulent loans for relatives. Barrett knowingly pushed through EIDL applications submitted by family members who did not qualify.
  
• Overrode legitimate denials. When SBA systems flagged applications as ineligible, she used her credentials to bypass the controls and approve them anyway.
  
• Submitted false certifications. She entered and attested to false information, including overstated revenues and misrepresented purposes for loan use.
  
• Misused the proceeds. Instead of supporting business operations, the funds were spent on personal expenses and non-business purchases.
  

Federal prosecutors described this as a deliberate abuse of her position of trust, where Barrett exploited both her knowledge of the system and her access as an employee to enrich herself and her associates. The total fraud loss exceeded $550,000, though less than $1.5 million.

Sentencing Exposure

Barrett pleaded guilty to one count under 15 U.S.C. § 645(a) (false statements), which carries:

• Prison: Up to 2 years
  
• Supervised Release: Up to 1 year
  
• Fine: Up to $250,000, or twice the gain/loss
  
• Restitution: Full repayment to SBA victims
  
• Forfeiture: Loss of any property tied to the fraud
  
• Special Assessment: $100
  

The government has agreed to recommend sentencing at the low end of the guideline range, provided Barrett complies with her plea terms.