Exclusive | Senators ask for breakdown of Minnesota fraud impact on SBA: Field day at taxpayers expense

WASHINGTON — A group of senators is pushing the Small Business Administration to give a detailed breakdown of its probe of the sweeping Minnesota welfare fraud scandal.Last month, SBA Administrator Kelly Loeffler launched an investigation into the network of Somali organizations implicated in the fraud scandal and later suspended payments to some 6,900 borrowers in Minnesota.Sen.

Joni Ernst (R-Iowa), who led the letter signed by all GOP members of the Senate Small Business Committee and Entrepreneurship, asked Loeffler to explain the parameters of the probe, including the firms being investigated.“Fortunately, the SBA has a vigilant leader at the helm, and we applaud your swift action in launching a full-scale investigation into this fraud and its overlap with SBA programs,” they wrote in the missive Thursday.“As the Trump Administration opens the books, many disturbing fraud schemes are being uncovered.”Minnesota has been rocked by a growing welfare fraud scandal.Since 2018, more than $9 billion, half of the $18 billion spent on 14 Medicaid programs, may have been swindled, according to Assistant US Attorney Joe Thompson.Some Democrats have questioned that statistic.

Since 2022, the Justice Department has slapped charges against 98 people, 85 of whom are of Somali descent, and 64 of whom have been convicted.Perhaps the poster child of the fraud is the since-defunct nonprofit Feeding Our Future, which was found to have stolen hundreds of millions of dollars, falsely claiming to have used them to dole out food to schoolchildren during the COVID-19 pandemic.

The senators noted that the SBA was tasked with overseeing sweeping COVID-19 relief measures, including Paycheck Protection Program (PPP) loans.“This Somali scheme is just the latest example of fraud endemic in COVID relief programs, which prioritized shoveling money out the door rather than implementing functioning oversight mechanisms to protect taxpayers,” the senators wrote.

They pointed to e...