Small Business Administration (SBA) Administrator Kelly Loeffler said Thursday night that her agency has suspended “6,900 Minnesota borrowers” over suspected fraudulent activity regarding COVID-era lending programs.
Loeffler said the SBA over the last week reviewed “thousands” of potentially “fraudulent” Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) payouts that were approved in Minnesota.
“Today, our agency took action to suspend 6,900 Minnesota borrowers amid suspected fraudulent activity. In total, these borrowers were approved for 7,900 PPP and EIDL loans worth approximately $400M,” Loeffler said on social platform X.
She said the implicated individuals would be banned from all SBA loan programs, “including disaster loans, going forward. We will also refer every case, where appropriate, to federal law enforcement for prosecution and repayment.”
The suspension comes as the House Committee on Small Business started an investigation into “fraud and concealment” within the PPP and EIDL, both programs that were established during the pandemic.
Loeffler said on Monday that SBA will pause annual grants to Minnesota amid the ongoing probe into the COVID-era programs.
“SBA is pausing annual funding to Minnesota while we investigate $430 million in suspected PPP fraud across the state,” she said on X.
Last week, Loeffler sent a letter to Minnesota Gov. Tim Walz (D) saying that SBA would pause $5.5 million in annual funding “pending further review.”
Prosecutors have charged nearly 100 people linked to an investigation into the fraud within Minnesota’s social programs, and Walz has directed a third-party audit of Medicaid billing within Minnesota’s Department of Human Services.
The federal Department of Health and Human Services said earlier this week it would pause all child care payments to Minnesota, citing a video posted by independent journalist Nick Shirley who outlined his investigation into fraud allegations in the North Star State’s day care centers and other businesses.
“After years, the American people will finally begin to see the criminals who stole from law-abiding taxpayers held accountable — and this is just the first state,” Loeffler said on Thursday.
