The Small Business Administration says the suspensions mark its largest single enforcement action tied to PPP and EIDL abuse and signals expanded criminal referrals.
By yourNEWS Media Newsroom
The Trump administration’s Small Business Administration announced Friday that it has suspended 111,620 California borrowers connected to approximately $8.6 billion in suspected pandemic-era fraud, following an internal review of federal relief programs created during COVID-19.
According to an agency statement announcing the action, the suspensions stem from suspected abuse of the Paycheck Protection Program and Economic Injury Disaster Loan programs, which were designed to keep small businesses operating and workers employed during the pandemic. The SBA said the move represents the most extensive enforcement action of its kind to date as the agency accelerates state-by-state audits of pandemic lending.
In a statement announcing the suspensions, SBA Administrator Kelly Loeffler said the findings reflect systemic failures left unaddressed for years.
“Once again, the Trump SBA is taking decisive action to deliver accountability in a state whose unaccountable welfare policies have created a culture of fraud and abuse at the expense of law-abiding taxpayers and small business owners,” Loeffler said. “Today, we announced we have suspended nearly 112,000 borrowers tied to at least $9 billion in suspected fraud. This staggering number represents the most significant crack-down on those who defrauded pandemic programs, and it illuminates the scale of corruption that the Biden Administration tolerated for years.”
Loeffler said the agency is coordinating with federal law enforcement to pursue criminal accountability and recover funds. “As we did in Minnesota, we are actively working with federal law enforcement to identify the criminals who defrauded American taxpayers, hold them to account, and recoup the stolen funds,” she said. “As we continue our state-by-state work, our message is clear: pandemic-era fraudsters will not get a pass under this Administration.”
In additional remarks posted publicly, Loeffler said California mirrored patterns seen in earlier reviews. “California, just like Minnesota, invites criminals to abuse the system with socialist welfare policies. Fraud scaled up massively during the pandemic – and the Biden Admin failed to stop it,” she wrote. She cited a visit to San Diego where “a single address” was allegedly linked to 14 separate businesses formed during the pandemic that collectively received more than $2 million in COVID-era loans that remain unpaid.
Loeffler added that the SBA will pursue criminal referrals with the Department of Justice and seek recovery of funds. “Today, the SBA is announcing the suspension of 111,620 California borrowers connected to $8.6 billion in suspected PPP and EIDL fraud. We will pursue criminal referrals with the DOJ, and fight to claw every dollar back,” she said. “Under this Administration, any fraudster who broke the law will no longer get a free pass. All they’ll get is a free trip to jail.”
The SBA also released a video summarizing the enforcement action, which Loeffler shared in a public post.
The California review follows a similar audit conducted earlier this year in Minnesota. In January, Loeffler said the agency identified nearly $400 million in potentially fraudulent PPP and EIDL loans in that state after reviewing thousands of pandemic-era approvals. The SBA subsequently suspended about 6,900 Minnesota borrowers tied to roughly 7,900 loans.
The agency said the California findings underscore the scale of unresolved pandemic fraud nationwide and that additional enforcement actions are expected as reviews continue in other states.
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