SBA suspends 6,900 Minnesota PPP/EIDL borrowers, flags $400M for fraud review
The SBA’s internal review flagged roughly 7,900 PPP and EIDL loans in Minnesota totaling about $400 million as suspected fraud and has suspended 6,900 borrowers from all SBA programs. Under current SBA policy those suspensions amount to permanent bars to future SBA participation, and the agency said it will refer the cases to federal law enforcement for potential prosecution and recovery, coordinating with a broader federal fraud probe of Minnesota-administered programs.
📌 Key Facts
- An SBA internal review flagged roughly 7,900 PPP and EIDL loans in Minnesota as suspected fraud, totaling about $400 million (report dated 2026-01-02).
- As a result of that review, 6,900 Minnesota borrowers have been suspended from all SBA programs.
- The suspensions cover participation in loans, guarantees and other SBA programs and, under current SBA policy, suspended borrowers are permanently barred from future SBA participation.
- The administrative suspensions are separate from any criminal charges that may be brought against individuals.
- The SBA plans to refer the suspected Minnesota cases to federal law enforcement for potential prosecution and recovery of funds.
- Those referrals will be coordinated with a broader federal fraud investigation into programs administered in Minnesota.
📊 Relevant Data
In Minnesota's fraud cases involving meals, housing, and autism therapy programs, 78 out of 86 charged individuals (90.7%) are of Somali ancestry, despite Somalis comprising approximately 1.5% of the state's population.
How Fraud Swamped Minnesota’s Social Services System — The New York Times
The SBA identified approximately $3 million in PPP and EIDL loans issued to indicted Somali-linked nonprofits in Minnesota, such as Feeding Our Future and Action for East African People.
LOEFFLER: Vast network of Somali nonprofits ripped off Minnesota’s welfare state — Fox News
Minnesota is home to more than 80,000 ethnic Somalis, the largest community outside of Africa, primarily due to refugee resettlement programs starting in the 1990s facilitated by agencies like Lutheran Social Services and Catholic Charities.
How Minnesota became the center of the Somali diaspora — Sahan Journal
Lax oversight in Minnesota's administration of federal funds, including fears of appearing racist, contributed to the proliferation of fraud in pandemic programs, allowing schemes to flourish without scrutiny.
LOEFFLER: Vast network of Somali nonprofits ripped off Minnesota’s welfare state — Fox News
📰 Source Timeline (2)
Follow how coverage of this story developed over time
- SBA’s internal review flagged roughly 7,900 PPP and EIDL loans in Minnesota totaling about $400 million as suspected fraud, and 6,900 borrowers have now been suspended from all SBA programs.
- Suspended borrowers are permanently barred from future SBA participation (loans, guarantees, and other programs) under current SBA policy, separate from any criminal charges that may follow.
- The SBA plans to refer Minnesota’s suspected cases to federal law enforcement for potential prosecution and recovery, in coordination with the broader federal fraud investigation into Minnesota-administered programs.