KELLY LOEFFLER: Loans fraud in Minnesota welfare programs continues to grow, SBA finds

When news broke of convictions for widespread fraud in various pandemic programs in Minnesota, the $1 billion price tag and more than 90 indictments were staggering. We now know that this is a very low estimate of the price Americans pay to fund corrupt government-run welfare programs.

The criminal nature of the scandal shook the country: A vast network of Somali nonprofits systematically ripped off federal programs at the height of the pandemic, leaving Minnesota families without vital services. The massive and sophisticated enterprise siphoned off billions of taxpayer dollars in fraudulent schemes aimed at nutrition, education and healthcare.

Thanks to lax oversight under Minnesota governor Tim Walz, a Democrat, organized crime infiltrated and then flourished brazenly. Even if there are dozens of whistleblowers repeatedly Walz, who voiced his concerns to state regulators and his own office, blamed only racism and shrugged off the allegations.

The governor recently defended the state’s “generosity” in allowing Somali scammers to buy luxury cars, homes and vacations at the expense of hungry Minnesotans. The welfare state is widely seen as a magnet for those who wish to become beneficiaries. Worryingly, welfare has now become the state’s largest annual expenditure; higher than education, highways and public safety.

TRUMP OFFICIAL FREEZES MILLIONS IN SBA AID TO MINNESOTA, WALZ’S POLICIES CREATE ‘ENDEMIC’ FRAUD

But new research has revealed that the fraud, including in the US, runs much deeper than initially suspected. Small Business Administration (SBA).

During the pandemic, the agency has helped save millions of small businesses and jobs by providing $1.2 trillion in loans. Most of these loans were legal, and most of the loans were forgiven pursuant to the 2020 CARES Act legislation. But the program was expanded in 2021 and became riddled with fraud — at least $200 billion, much of which went completely unaddressed and was largely forgiven under the Biden administration.

Under my direction, SBA launched an investigation Into the Minnesota scammers. It took just a few days to find nearly $3 million in Paycheck Protection Program (PPP) loans and COVID-19 Economic Injury Disaster Loans (EIDL) for multiple nonprofits charged, including groups like Feeding Our Future and Action for East African People.

Because of this disproportionate level of potential fraud and ongoing allegations arising in other federal programs, we have expanded our scope to investigate every COVID-19 loan made in Minnesota. Within weeks, we uncovered a staggering 13,600 PPP loans that were flagged for fraud but later approved; these loans totaled approximately $430 million in potential fraud funds that should have been used to save jobs and businesses on Main Street. In most cases, loans were fully forgiven.

AFTER MINNESOTA AG’S PUBLICATIONS ABOUT THE SOLUTION AGAINST FORGERY, SOCIAL MEDIA SHARED: ‘YOU ARE KIDDING, RIGHT?’

Me on December 23 informed The governor said he was withholding about $5.5 million in annual funding from the SBA to Minnesota pending further review in an effort to avoid wasting taxpayer dollars in a state that clearly lacks appropriate controls to manage federal funds responsibly. We are actively working with our law enforcement partners to hold criminals accountable for possible pandemic-era frauds that are currently under investigation.

One thing is clear: The scale of fraud in Minnesota proves that misuse of federal dollars is endemic to the state’s welfare system and the logical conclusion of socialist programs designed to pump out funding without accountability. Other states need to be warned.

The US Treasury Department is now reason Believing that some of the stolen pandemic funds funded Al-Shabaab, Somalia’s al-Qaeda-backed terror wing. The U.S. Department of Agriculture has asked the state to recertify many SNAP recipients. Prosecutors believe at least half of the $18 billion the state has spent on Medicaid and related programs since 2018 is fraud.

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Americans have always known that welfare results in some level of fraud, but in Minnesota—where socialist welfare “generosity” is a way of life, not a safety net— criminal activity has taken root on an industrial scale.

Within weeks, we uncovered a staggering 13,600 PPP loans that were flagged for fraud but later approved; these loans totaled approximately $430 million in potential fraud funds that should have been used to save jobs and businesses on Main Street.

Accountability must result from these government-wide investigative efforts, including subpoenas, prosecution, restitution, and imprisonment. But given the abject failures on display in states like Minnesota, new welfare checks on federal programs like the work requirements in the One Big Good Bill Act seem particularly prescient and urgent.

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With more than 80 federal welfare programs spending $1 trillion a year, there’s a lot of work to be done. The Trump administration is aggressively going after bad actors and implementing reforms to protect welfare programs for real American families in need; It also ensures that this is a lifeline and not a lifestyle.

Leaders in Minnesota are not interested or capable of fulfilling that mission, and the unfolding scandals raise serious questions about what is happening in states like California and Illinois. The Trump administration is committed to exposing welfare abuse wherever it exists and enforcing accountability in states that allow fraud to thrive at the expense of law-abiding Americans and taxpayers.