Lawmakers probe SBA loans linked to Minnesota’s $9B fraud scandal: ‘Reckless decision making’

The House Small Business Committee sent a letter this week to the Small Business Administration demanding answers on federal pandemic relief funds that flowed from the Biden administration to entities in Minnesota possibly connected to the massive unfolding fraud scandal.

In a letter sent Monday to SBA Administrator Kelly Loeffler, the committee said it is conducting oversight into reports of fraud and concealment involving the Paycheck Protection Program (PPP) and the COVID-19 Economic Injury Disaster Loan (EIDL) program, both of which were created to help small businesses survive the COVID-19 pandemic.

The letter cited public reporting and federal prosecutions tying Minnesota-based nonprofits and individuals to massive fraud schemes that drained hundreds of millions of dollars from federal programs under Democratic Gov. Tim Walz’s watch.

The letter also points out that the Minnesota nonprofit Feeding Our Future was at the center of what the Justice Department has called the largest pandemic relief fraud scheme charged in U.S. history, with 78 individuals charged as of late November in a case involving roughly $250 million in fraudulent claims as part of an overall system of fraud that prosecutors said last week could total up to $9 billion or more.

‘The SBA’s COVID lending programs were created to keep small businesses afloat during an unprecedented crisis, not to subsidize fraud,’ Small Business Committee Chairman Roger Williams, R-Texas, told Fox News Digital in a statement. 

‘Under the Biden-Harris administration, weak oversight and reckless decision-making allowed bad actors to exploit these programs and steal hundreds of millions in taxpayer dollars. The Feeding Our Future case highlights the severity of these failures, and the Committee on Small Business is determined to hold those responsible accountable.’

The committee’s letter requests detailed records on PPP and EIDL loans issued to dozens of individuals and businesses tied to Minnesota-based fraud investigations, including loan amounts, disbursement dates, forgiveness decisions and internal SBA communications.

Lawmakers are also seeking all documents and communications between the SBA and Walz’s office or Minnesota state agencies during the Biden-Harris administration, arguing such records are necessary to determine whether warning signs were ignored or oversight failed.

In a statement to Fox News Digital, Loeffler says she is looking forward to working with Congress to get to the bottom of the situation. 

‘Earlier this month, SBA determined that numerous Somali nonprofits indicted as part of the $1 billion pandemic fraud scandal in Minnesota received PPP and EIDL Loans totaling at least $2.5 million, including Feeding Our Future,’ Loeffler said. 

‘SBA has since broadened its investigation to uncover pandemic-era fraud across the entire state of Minnesota and looks forward to working in partnership with Congressional leaders to uncover the full depth of the abuse and deliver accountability on behalf of American taxpayers.’

The letter asks for the documents to be provided by Jan. 12, 2026.

On Tuesday, Fox News Digital first reported that Loeffler sent a letter to Walz alerting him that her agency will ‘halt’ more than $5.5 million in annual support to resource partners in the state ‘until further notice.’