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 examples of the “Insane Crip Gang” using PPP loans to purchase weapons and fraudsters using COVID-19 relief money to give kickbacks to government officials in a $63 million scheme.
Loeffler’s pause on certain funds flowing to Minnesota included borrowers who received an estimated $400 million in COVID relief loans.
The trio of senators is hoping to get a breakdown of the SBA’s probe of Minnesota, a broader rundown of “currently-in-operation SBA programs” subject to fraud concerns, details about steps being taken to recover stolen funds, and more.
They are hoping to get that material by Jan. 19.
“The Biden administration and Tim Walz allowed criminals to have a field day at taxpayers’ expense,” Ernst told The Post in a statement about the letter to Loeffler.
“We must ensure that this level of fraud is never allowed to happen again. I will continue to root out waste, fraud, and abuse in Washington and equip the Department of Justice with the tools they need to hold accountable those who stole from the American people.”
The Hawkeye State senator recently raised concerns about over $1 million in federal funds earmarked to a Somali-led Minnesota addiction recovery group championed by “Squad” Rep. Ilhan Omar (D-Minn.)
The group, named Generation Hope MN, was run by three people who say they live in the same house. Generation Hope MN is supposedly operating from above a Somali restaurant.
Ernst has also previously backed legislation, the SBA Fraud Enforcement Extension Act, to extend the statute of limitations on fraud in key COVID-19 relief programs. That legislation has cleared the Senate Small Business Committee but hasn’t yet received a vote.
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