The Small Business Administration is halting federal funding to Minnesota as it probes potential fraud in the state, the head of the agency announced Monday.
“SBA is pausing annual funding to Minnesota while we investigate $430 million in suspected PPP fraud across the state,” SBA Administrator Kelly Loeffler wrote on X.
“This Admin will not continue to hand out blank checks to fraudsters – and we will not rest until we clean up the criminal networks that have been stealing from American taxpayers,” she added.
More than $800 billion in loans were provided to small businesses during the pandemic through the Paycheck Protection Program (PPP).
Loeffler notified Minnesota Democratic Gov. Tim Walz last week that SBA would freeze more than $5.5 million in funding to the North Star State pending further review.
In her letter to Walz, Loeffler noted individuals indicted in Minnesota’s “$1 billion pandemic scheme involving a massive Somali fraud network” also received at least $3 million in PPP loans.
The SBA has since identified 13,600 additional PPP loans in Minnesota — totaling $430 million — suspected as fraudulent, according to Loeffler.
“With dozens of investigations underway, the conclusion is unavoidable,” Loeffler wrote last week. “Minnesota cannot be trusted to administer federal tax dollars. Its socialist welfare system has enabled fraud at industrial scale, at the expense of honest Americans – and these are the consequences.”
Walz’s office noted that PPP “is a federal program created, administered, and disbursed by the federal government” and blamed Loeffler for not identifying any alleged fraud in the program.
“The Walz Administration has no role,” his office said.
Walz has come under even more scrutiny in light of a viral video alleging rampant day care funding fraud in the state.
Last week, independent journalist Nick Shirley released video footage of himself visiting several Minnesota day care facilities reportedly receiving state funds and finding them devoid of children.
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