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The Small Business Administration (SBA) announced Thursday that it had suspended 6,900 Minnesota Borrowers after uncovering what he says was widespread alleged fraud.
SBA Administrator Kelly Loeffler said the agency reviewed thousands of Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL) loans approved in Minnesota, and identified nearly $400 million in potentially fraudulent loans linked to Minnesota borrowers.
“These individuals will now be banned from all SBA loan programs, including disaster loans,” Loeffler wrote on X.
Loeffler said the agency would refer appropriate cases to federal law enforcement for prosecution and reimbursement.
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The Small Business Administration announced the suspension of nearly 7,000 Minnesota borrowers after identifying hundreds of millions of dollars in suspected pandemic loan fraud. (Bill Clark/CQ-Roll Call, Inc via Getty Images)
“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,” she said.
The alleged fraudulent activity included 7,900 PPP and EIDL loans approved during the COVID-19 pandemic, Loeffler said.
The announcement comes as Minnesota Gov. Tim Waltz and his administration face scrutiny for billions of dollars in social services fraud.
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Loeffler sent a letter Tuesday to Walz on Dec. 23, telling him her agency would “stop” more than $5.5 million in annual support for the state’s resource partners “until further notice.”
“I am informing you that effective immediately and until further notice, the SBA is suspending the disbursement of federal funds to SBA resource partners operating in the State of Minnesota, totaling more than $5.5 million in annual support,” Loeffler wrote.
The SBA said at least $2.5 million in PPP and EIDL funds issued during the pandemic period were tied to a Somali based fraud scheme in Minneapolis.
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SBA Administrator Kelly Loeffler announced the suspension of thousands of Minnesota borrowers as Gov. Tim Walz’s administration faces scrutiny over alleged pandemic-era fraud. (Anna Moneymaker/Getty Images; Chip Somodevilla/Getty Images)
Loeffler told Walz that $430 million in PPP funds tied to about 13,000 loans had been flagged as potentially fraudulent but still funded, including some that were canceled under the Biden administration.
“The volume and concentration of potential fraud is staggering, matched in scale only by your response to those who tried to stop him,” she wrote.
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The SBA says it has flagged nearly $400 million in potentially fraudulent PPP and EIDL loans linked to Minnesota borrowers. (AP Photo/Rod Lamkey, Jr.)
Fox News Digital has reached out to Walz’s office for comment.
Charles Creitz of Fox News Digital contributed to this report.
