Kelly Loeffler, head of the U.S. Small Business Administration (SBA), announced she halted $5.5 million in federal payments to Minnesota on Dec. 23, citing the state’s fraud scandals, estimated to total $9 billion, and specific concerns that her agency uncovered.
SBA investigators found at least $2.5 million in pandemic-relief loans “granted to individuals indicted as part of the Somali fraud scheme,” she wrote in a letter to Minnesota Gov. Tim Walz. In addition, the agency found Minnesota doled out 13,600 pandemic-relief loans—worth $430 million—that are “suspected as fraudulent.” Prosecutors have stated that most of the defendants indicted in three major scandals in the state are of Somali origin.
“Minnesota cannot be trusted to administer federal tax dollars,” Loeffler wrote on X, separately linking to the letter she sent Walz. She described the withheld money as “funds to SBA resource partners.”
“The volume and concentration of potential fraud is staggering, matched in its egregiousness only by your response to those who attempted to stop it,” she wrote.
She accused state leaders of inaction when the allegations of fraud came to light. “When legislators and whistleblowers raised concerns about potential abuse during the pandemic, your Administration resisted oversight, refused accountability, and allowed the misconduct to metastasize,” she wrote.
The Epoch Times sought comment from Walz but received no reply prior to publication time.