Trump’s SBA Cracks Down On Minnesota
The Small Business Administration (SBA) announced Thursday that it has suspended thousands of Minnesota borrowers following the discovery of what officials describe as significant suspected fraud tied to COVID-era federal relief programs.
SBA Administrator Kelly Loeffler said the agency recently completed an internal review of thousands of Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) payments issued during the pandemic. The review identified widespread irregularities that raised serious concerns about the misuse of taxpayer-funded assistance.
According to Loeffler, 6,900 Minnesota borrowers have now been suspended from SBA programs after being approved for approximately 7,900 loans totaling nearly $400 million.
“These suspensions are the result of suspected fraudulent activity involving COVID-era relief,” Loeffler stated in a public post. “Our responsibility is to protect taxpayer dollars and ensure federal programs are used as intended.”
The SBA confirmed that individuals flagged in the investigation will be barred from all future SBA lending programs, including disaster assistance. Cases deemed appropriate will also be referred to federal law enforcement agencies for potential prosecution and recovery of funds.
The enforcement action coincides with a new investigation launched by the House Committee on Small Business, which is examining allegations of fraud and concealment within pandemic relief programs nationwide. Lawmakers have raised concerns for years about oversight failures during the rapid rollout of emergency aid.
Earlier this week, the SBA also announced it is pausing annual federal grants to the state of Minnesota while investigators review an estimated $430 million in suspected PPP-related fraud. In a letter sent to Governor Tim Walz, the agency confirmed that $5.5 million in annual funding has been placed on hold pending further review.
Minnesota has faced mounting scrutiny in recent years over the administration of public assistance programs. Federal prosecutors have already charged nearly 100 individuals in cases linked to fraud investigations involving state-run social services.
Separately, state officials have initiated a third-party audit of Medicaid billing practices within Minnesota’s Department of Human Services to address concerns about improper payments.
The U.S. Department of Health and Human Services also announced this week that it will temporarily halt federal child care payments to Minnesota, citing information raised in an independent investigation into alleged financial misconduct involving daycare centers and other businesses.
Loeffler emphasized that the enforcement actions reflect a broader shift toward accountability.
“For years, Americans have demanded stronger oversight and responsible use of federal funds,” she said. “This effort is about restoring trust, protecting taxpayers, and ensuring relief programs serve legitimate small businesses.”
