The Trump administration uncovered an additional $400 million in suspected fraud in the state of Minnesota, this time tied to COVID-era loan programs, according to a Thursday announcement by Small Business Administration Administrator Kelly Loeffler.
Nearly 7,000 individuals in the state have been suspended from all SBA programs and could soon face prosecution. Loeffler said her agency identified 6,900 borrowers who may have fraudulently obtained federal pandemic loans through the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) program.
“Over the last week, SBA has reviewed thousands of potentially fraudulent pandemic-era PPP and EIDL loans approved in Minnesota,” Loeffler posted on X. “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 added that the individuals in question will be permanently barred from accessing SBA loan programs and could face federal prosecution. “We will also refer every case, where appropriate, to federal law enforcement for prosecution and repayment,” she said. “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.”
This latest action follows a series of aggressive moves by the Trump administration targeting suspected fraud in Minnesota’s public programs. Earlier this week, the Department of Health and Human Services froze all federal child care payments to the state over reports that taxpayer dollars had been funneled to fraudulent daycare operations.
Attorney General Pam Bondi confirmed that further prosecutions are underway. “This isn’t over,” she told reporters. “We are only beginning to scratch the surface of what looks to be one of the worst cases of systemic fraud in the country.”
Investigators are also looking into schemes in which children were falsely diagnosed with autism at clinics that allegedly skipped proper evaluations. Much of the attention is focused on the state’s Somali immigrant population, which has been at the center of several federal fraud cases. Of the 98 people charged so far, 85 are of Somali descent.
Democrat Governor Tim Walz has pushed back, claiming the Trump administration is using fraud investigations as a justification to cut off federal support. “We’ve spent years cracking down on fraud,” Walz said earlier this week. “Trump is using this to target our state.”
But federal watchdogs say fraud was rampant across the country during the pandemic. The SBA’s inspector general reported in 2023 that an estimated $200 billion in pandemic aid — nearly 17% of the total funds — may have been stolen or improperly distributed. The report cited “a pay and chase environment” that lacked basic controls and invited mass abuse.
“The allure of ‘easy money’ attracted an overwhelming number of fraudsters,” the inspector general noted. “Our ongoing reviews have identified multiple weaknesses in oversight that allowed billions to be diverted from the businesses and families that needed it most.”
Trump officials say Minnesota is just the beginning. More states are expected to face investigations as the administration digs deeper into what it calls the “largest theft of taxpayer money in American history.”
The post Trump Admin Uncovers Another $400 Million In Suspected Minnesota Fraud appeared first on Real News Now.
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