SBA Uncovers Massive Fraud in California: 111,620 Borrowers Linked to $8.6 BILLION in Pandemic Fraud

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The U.S. Small Business Administration (SBA) has suspended 111,620 California borrowers linked to $8.6 billion in suspected fraud across Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) pandemic-era relief programs in the Golden State.

SBA Administrator Kelly Loeffler compared the massive fraud in the deep blue state to what’s been discovered in Democrat-run Minnesota.

“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 said in a statement on X Friday.

The shocking revelation comes just one day after California Attorney-General Rob Bonta dismissed claims of widespread fraud in the state as ”baseless.”

“Trump claims California is wasting money when in reality our programs are helping lower income individuals and lower income families get healthcare, food and housing assistance,” Bonta said Thursday.

The AG called it “partisan political theater,” and just an effort from the Trump administration to “sow distrust” in the Democrat-run state.

The suspended borrowers in California are accused of improper activity, such as submitting false applications, misrepresenting payroll or employee numbers, and using funds for unauthorized purposes.

“In San Diego, I visited a single address tied to 14 different “small businesses” that were formed during the pandemic, who received $2M+ in COVID-era loans that still haven’t been fully repaid,” Loeffler said.

The SBA is working with federal law enforcement and the SBA Office of Inspector General (OIG) to investigate and recover stolen funds.

This crackdown follows a similar action in Minnesota, where 6,900 borrowers tied to $400 million in fraud were suspended.

“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 in a statement to the New York Post.

“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” she continued.

“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. As we continue our state-by-state work, our message is clear: pandemic-era fraudsters will not get a pass under this Administration,” Loeffler concluded.

Recent cases include a California man sentenced for defrauding the PPP of $3.6 million and another who used $7.25 million in fraudulently obtained funds to buy luxury vehicles and real estate.

The SBA is continuing its state-by-state investigation, emphasizing that pandemic-era fraudsters will not go unpunished. Individuals suspected of fraud  face criminal charges, fines, and asset seizures.

“The era of abuse is over,  Loeffler declared on X.  “We will pursue criminal referrals with the DOJ, and fight to claw every dollar back.”

She added: “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.”