BALTIMORE — Thousands of businesses applied for assistance following the Francis Scott Key Bridge collapse with nearly half being rideshare and taxi services, followed by trucking companies and restaurants. But Relentless Management Group LLC, a business management firm for athletes and entertainers, received nearly $1 million in taxpayer funds - the second-highest amount among all applicants. Despite attempts to understand how the Key Bridge disaster impacted this business enough to warrant substantial taxpayer support, the managing partner did not respond.
Watch Matter for Mallory: Who got SBA loans after the Key Bridge Collapse
Relief for businesses impacted by the Key Bridge collapse
"As you can imagine, it was chaos. Our business, really, for the most part, shut down almost overnight," said Michael Clark, owner and president of BTR Capital Group, a warehousing and logistics company near the port.
Clark looked for ways to continue paying his workers and received $857,800 in a Small Business Administration Economic Injury Disaster Loan (EIDL). These loans offer a year of no payments and an interest rate of 4 percent for small businesses and 3.25 percent for private non-profits with terms up to 30 years.
"That loan saved us and allowed us to get back to where we are today," Clark said.
Of the 2,393 businesses and non-profits awarded $134 million in disaster loans, a Dundalk trucking company topped the list with over $1 million, while Clark's company ranked third. Clark didn't hesitate to show how he used the funds.
But the second-highest recipient, Relentless Management Group LLC, an accounting and business advisory firm representing athletes, entertainers, and entrepreneurs, is nowhere to be found.
How was a management firm for athletes and entertainers impacted by the bridge disaster?
WMAR-2 News Mallory Sofastaii traveled to Hyattsville, Maryland, about 40 miles from the Key Bridge, to the address listed on the small business loan application. No one answered, and no one responded to numerous calls and emails.
She then visited an address tied to the business loan applicant, Kibwe Jabar (K.J.) Hughes. A woman answered but claimed no knowledge of the loan.
"I don't know anything. I'm just here to take care of the house, so I would not know," she said when asked about the $995,000 SBA loan.
Public records show Relentless Management Group's business license was forfeited by the state comptroller in October - two months after receiving the SBA loan. Records also show K.J. Hughes has outstanding federal tax liens exceeding $1 million, some dating to 2016.
When asked if tax liens affect loan eligibility, the SBA said they "don't discourage anyone from applying" and that loan officers request information then make determinations.
Oversight of SBA lending programs
"What happens is an applicant fills out the information on the form, the self-reported information, and no one bothers to validate it," said Haywood Talcove, CEO of LexisNexis Risk Solutions Government Business.
Talcove submitted written testimony in February to a congressional committee regarding widespread fraud within government assistance programs.
"The public sector has become a piggy bank for fraud, and it is stealing money from hard working taxpayers," Talcove said.
A recent Government Accountability Office report found the SBA disbursed over $200 billion in potentially fraudulent COVID EIDL and PPP loans, or about 17 percent of the total disbursed funds for these programs. More than half the funding was released before the agency fully implemented its four-step fraud detection process.
"I mean, it is so easy to take advantage of SBA loans during disasters," Talcove said.
Previous federal disaster assistance
WMAR-2 News also submitted a FOIA request for Relentless Management Group's loan application seeking details on how the bridge collapse affected their business operations. It came back heavily redacted.
However, USAspending.gov, a government website tracking federal spending, shows Relentless Management Group has previously been awarded federal disaster funds, including approximately $794,259 through the Shuttered Venue Operators Grant Program during the COVID-19 pandemic, $318,222 in Paycheck Protection Program (PPP) loans that were forgiven, and a $2 million SBA disaster loan in 2022.
The SBA's FOIA Office indicated that while repayment status for disaster loans is not disclosed, they could confirm whether a loan is charged off or paid in full. After 13 email requests for information on whether the $2 million loan has been repaid or forgiven, the SBA has not responded.
Hughes' other DC-area business received funding from a $1.25 million DC government fund. In an article about the investment, the Washington Informer quoted him as saying: "To fund a business, you have to do a number of things whether it is to pull up your bootstraps and fund it yourself or beg, borrow, and steal for the money."
SBA's position
When asked about their vetting process, an SBA spokeswoman stated only that "loan officers request detailed information and make the determination."
Design by Kelly GroftOn day one as SBA Administrator, Kelly Loeffler committed to eliminating fraud, waste, and abuse in lending programs. Regarding the nearly million-dollar loan to Relentless Management Group, she responded:
"Well, let me just say, first of all, small businesses deserve relief when there's a disaster. However, anyone that tries to game the system and does not deserve disaster relief should not be getting it," Loeffler said.
The SBA did not respond to an interview request with the SBA Fraud Czar appointed by Administrator Loeffler. Instead, SBA Press Secretary Maggie Clemmons sent this statement:
“Under the leadership of Administrator Kelly Loeffler, the SBA has a zero-tolerance policy towards fraud and is fully committed to protecting the integrity of our loan programs on behalf of taxpayers and small businesses alike. All suspected fraud, including that dating back to the Biden Administration, will be referred to the SBA Office of the Inspector General for review and enforcement."
The SBA Inspector General denied WMAR-2 News' FOIA request for Relentless Management Group's loan records, citing an "open investigation" and stating that document release "may interfere with enforcement proceedings."
SBA officials maintain that even if a business closes, loans must be repaid.
WMAR-2 News mapped the businesses awarded funds through the SBA Key Bridge disaster loan program. It was open to businesses in all of Maryland and D.C. as well as parts of Virginia, Delaware, Pennsylvania, and West Virginia.
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