Particle.news
Download on the App Store

SBA Suspends 6,900 Minnesota Borrowers Over Suspected $400 Million Pandemic Loan Fraud

The crackdown highlights vulnerabilities created by emergency self-certification in pandemic loan programs.

Overview

  • The suspensions cover about 7,900 PPP and EIDL loans reviewed in Minnesota, according to Administrator Kelly Loeffler.
  • Suspended individuals are barred from all SBA lending going forward, with cases to be referred to federal law enforcement for prosecution and repayment.
  • The SBA is halting more than $5.5 million in annual federal support to Minnesota resource partners pending further notice from the agency.
  • At least $2.5 million in pandemic loans were tied to a Somali fraud scheme based in Minneapolis, and a focused probe of related networks is underway.
  • Loeffler told Gov. Tim Walz that roughly $430 million across about 13,000 PPP loans were flagged as potentially fraudulent yet funded, some later forgiven.