SBA Administrator Kelly Loeffler and Sen. Joni Ernst (R-IA) expressed support for a guilty plea from a former SBA loan officer involved in fraudulent loan approvals exceeding $500,000 for herself and family members.
The Department of Justice (DOJ) announced that former SBA loan officer Lena Barrett pleaded guilty on August 11 to submitting false statements on applications for over $550,000 in fraudulent loans tied to the pandemic.
In May 2021, Barrett submitted a fraudulent application for $170,000 through the Economic Injury and Disaster Loan (EIDL) program, which was initially rejected. Despite this, she later approved the loan for herself and relatives. Ultimately, Barrett received around half of the $550,000 she had sought.
Administrator Loeffler emphasized that this guilty plea reflects the Trump administration’s commitment to combating fraud during the pandemic. “From the start, the SBA has been dedicated to recovering every dollar lost to COVID scams that have harmed Americans over the past four years,” Loeffler stated. “This recent plea represents a significant step in holding fraudsters accountable and enforcing the law against wrongdoers.”
The DOJ has also managed to secure guilty pleas from two others related to pandemic aid fraud:
In a related matter, Sheena Thompson, 49, from Conyers, Georgia, pleaded guilty on April 15, 2025, for making false statements to the SBA while attempting to secure over $150,000 through a fraudulent EIDL loan. Her sentencing is set for November 12, 2025. In another case, on August 12, 2025, Detra Lewis, 40, also from Atlanta, pleaded guilty for submitting false information to the SBA, resulting in over $1.25 million from a fraudulent payroll protection loan. Lewis is scheduled for sentencing on November 14, 2025.
“The misuse of authority to fraudulently obtain disaster loan funds undermines the trust of small businesses that depend on essential relief,” Loeffler said. “The OIG is focused on protecting taxpayer money and ensuring accountability for those misusing critical programs.”
Sen. Ernst, chair of the Senate Small Business Committee, noted this incident underscores the urgent need for reforms to prevent future fraud. “This situation highlights the systemic issues in bureaucratic processes, where individuals misused their positions to secure significant COVID funding at the expense of legitimate small businesses,” she commented.
She emphasized, “This is precisely why we need to pass stronger SBA fraud enforcement laws to make sure that fraudsters are held accountable and that stolen funds can be recouped.”
Ernst’s fraud enforcement legislation aims to extend the statute of limitations on fraud cases related to the EIDL program and the closed Venue Operator Grant (SVOG), ensuring that offenders are pursued. Similar actions were taken in 2022 to extend protections under the Paycheck Protection Program (PPP).
While many have exploited pandemic-related relief programs, thousands of legitimate restaurants in states like Iowa and Texas have faced struggles due to funding shortages.
The law proposed by Ernst has already cleared the Small Business Committee and is awaiting further consideration in the Senate.
In a March report, the Government Accountability Office (GAO) indicated that there were significant gaps in referrals due to insufficient information from the SBA. A June report from a Pandemic Response Accountability Committee suggested that $79 billion in fraud could have been avoided with basic application reviews prior to approval.
The GAO’s investigation revealed potential oversights involving hundreds of billions of dollars in pandemic aid disbursed through loans and grants.
