NEWNow you can listen to Fox News articles!
The Small Business Administration (SBA) announced Thursday that it has suspended 6,900 Minnesota borrowers after uncovering what it says is suspected widespread fraud.
SBA Director Kelly Loeffler said the agency reviewed thousands of Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) loans approved in Minnesota, and identified nearly $400 million in potentially fraudulent loans tied to borrowers in Minnesota.
“These individuals will be barred from all SBA loan programs, including disaster loans, going forward,” Loeffler wrote in X.
Loeffler said the agency will refer appropriate cases to law enforcement for prosecution and payment.
TRUMP POINTS TO MINNESOTA CONSULTING ALLEGATIONS, SAYS ‘WE’LL GET TO THE BOTTOM OF YOU’
The Small Business Administration announced the suspension of nearly 7,000 Minnesota borrowers after identifying hundreds of millions of dollars in alleged loan fraud. (Bill Clark/CQ-Roll Call, Inc via Getty Images)
“After years, the American people will finally begin to see criminals who steal from law-abiding taxpayers be held accountable — and this is the first state,” he said.
The alleged fraud involved 7,900 PPP and EIDL loans approved during the COVID-19 crisis, Loeffler said.
The announcement comes as Minnesota Governor Tim Walz and his administration face a multibillion-dollar social services fraud scandal.
CHAIRMAN OF MINNESOTA’S PROBATION COMMITTEE WANTS WALZ TO ‘TURN EYE ON SCAMMER’ SCAMMER WARNING FOR YEARS.
Loeffler sent a letter Tuesday to Walz on Dec. 23, telling him that his agency would “freeze” more than $5.5 million in annual support to state resource partners “until further notice.”
“I am pleased to announce that effective immediately and until further notice, the SBA is suspending federal funding for SBA service partners operating in the state of Minnesota, including more than $5.5 million in annual support,” Loeffler wrote.
The SBA said at least $2.5 million in PPP and EIDL funds disbursed during the violence were linked to a Minneapolis-based Somalia fraud scheme.
HHS ELIMINATES CHILD CARE PAYMENTS FOR MINNESOTA DUE TO INFANT NEGLECT ALLEGATIONS
SBA Director Kelly Loeffler announced the suspension of thousands of Minnesota borrowers as the administration of Gov. (Anna Moneymaker/Getty Images; Chip Somodevilla/Getty Images)
Loeffler told Walz that $430 million in PPP funds tied to about 13,000 loans have been flagged as potentially fraudulent but are still funded, including some forgiven during the Biden administration.
“The volume and focus of potential fraud is staggering, matched in its magnitude only by your response to those who try to stop it,” he wrote.
CLICK HERE TO DOWNLOAD THE FOX NEWS PROGRAM
The SBA says it has flagged nearly $400 million in potentially fraudulent PPP and EIDL loans tied to Minnesota borrowers. (AP Photo/Rod Lamkey, Jr.)
Fox News Digital has reached out to Walz’s office for comment.
Fox News Digital’s Charles Creitz contributed to this report.
