The Small Business Administration (SBA) is halting federal funding to Minnesota amidst an investigation into potential fraud, according to an announcement made on Monday.
SBA Administrator Kelly Loeffler stated, “The SBA is suspending annual funding to Minnesota while it investigates $430 million in suspected PPP fraud across the state.”
She emphasized, “This administrator is not going to continue handing blank checks to fraudsters, and we will not rest until we root out the criminal networks that continue to steal from American taxpayers.”
The Paycheck Protection Program (PPP) has allocated over $800 billion in loans to small businesses during the pandemic. Loeffler informed Minnesota’s Democratic Governor Tim Walz last week that over $5.5 million in funding would be frozen pending further review.
In her communication to Walz, Loeffler pointed out that some individuals charged in a “$1 billion pandemic scheme involving a massive Somali fraud network” had secured at least $3 million in PPP loans.
Additionally, Loeffler mentioned that the SBA had identified about 13,600 potentially fraudulent PPP loans in Minnesota, amounting to $430 million.
She remarked, “With dozens of investigations underway, the conclusion is inevitable.” She further stated, “Minnesota cannot trust federal tax administration. Minnesota’s socialist welfare system enables industrial-scale fraud at the expense of honest Americans, and this is the result.”
Walz’s office responded by emphasizing that the PPP is “a federal program created, administered, and expended by the federal government,” and accused Loeffler of not properly addressing alleged issues within the program. They asserted, “The Walz administration has no role to play.”
Scrutiny on Walz has increased, particularly after a viral video surfaced, alleging widespread day care funding fraud in the state.
Independent journalist Nick Shirley recently shared video footage of visits to several day care facilities in Minnesota that reportedly received state funds, finding some children absent.
