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The House Small Business Committee has demanded answers from the Small Business Administration regarding pandemic relief funds that may be connected to a massive fraud scandal in Minnesota. In a letter sent Monday to SBA Administrator Kelly Loeffler, the committee outlined its investigation into potential fraud involving the Paycheck Protection Program (PPP) and COVID-19 Economic Injury Disaster Loan (EIDL) program.
The congressional inquiry focuses on Minnesota-based nonprofits and individuals allegedly linked to extensive fraud schemes that diverted hundreds of millions of dollars from federal relief programs during Democratic Governor Tim Walz’s administration. At the center of these allegations is the nonprofit Feeding Our Future, which the Justice Department has identified as the focal point of what it calls the largest pandemic relief fraud scheme ever charged in U.S. history.
“The SBA’s COVID lending programs were created to keep small businesses afloat during an unprecedented crisis, not to subsidize fraud,” said Small Business Committee Chairman Roger Williams, R-Texas. “Under the Biden-Harris administration, weak oversight and reckless decision-making allowed bad actors to exploit these programs and steal hundreds of millions in taxpayer dollars.”
The scale of the fraud is staggering. According to federal prosecutors, approximately 78 individuals had been charged as of late November in connection with roughly $250 million in fraudulent claims. However, prosecutors recently indicated the overall system of fraud could total up to $9 billion or more, representing one of the most significant misappropriations of government funds in recent history.
The committee’s letter requests extensive documentation from the SBA, including detailed records on PPP and EIDL loans issued to dozens of individuals and businesses tied to Minnesota-based fraud investigations. The requested information encompasses loan amounts, disbursement dates, forgiveness decisions, and internal SBA communications related to these cases.
Additionally, lawmakers are seeking all documents and communications between the SBA and Governor Walz’s office or Minnesota state agencies during the Biden-Harris administration. The committee believes these records are essential to determine whether warning signs were ignored or if systematic oversight failures occurred that enabled such widespread fraud.
In response to the committee’s inquiry, Administrator Loeffler stated that the SBA is committed to cooperating with Congress. “Earlier this month, SBA determined that numerous Somali nonprofits indicted as part of the $1 billion pandemic fraud scandal in Minnesota received PPP and EIDL Loans totaling at least $2.5 million, including Feeding Our Future,” Loeffler said.
The SBA has already taken preliminary action in response to the developing situation. On Tuesday, Loeffler sent a letter to Governor Walz informing him that the agency will “halt” more than $5.5 million in annual support to resource partners in Minnesota “until further notice,” signaling the seriousness with which federal officials are treating the allegations.
The potential implications of this investigation extend beyond the immediate financial impact. The case raises significant questions about the effectiveness of federal oversight mechanisms for emergency relief programs, particularly during crisis situations when funds are disbursed rapidly to address urgent needs.
The committee has requested that all relevant documents be provided by January 12, 2026, setting a clear timeline for the SBA’s compliance with the congressional investigation.
This case highlights the ongoing challenges in balancing rapid deployment of emergency assistance with adequate safeguards against fraud and abuse. As federal programs designed to provide critical relief during extraordinary circumstances, the PPP and EIDL became lifelines for many legitimate small businesses during the pandemic. However, the alleged widespread fraud in Minnesota suggests that vulnerabilities in the system may have been exploited on a scale previously unimagined.
The outcome of this investigation could potentially influence future approaches to emergency relief programs and accountability measures within federal agencies responsible for distributing billions in taxpayer funds during national crises.
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10 Comments
This is a troubling development that highlights the importance of robust oversight and accountability measures for government relief programs, especially during times of crisis. I hope the SBA and congressional investigators can get to the bottom of this and ensure that such large-scale fraud does not happen again.
Agreed. Proper safeguards and monitoring are crucial to protect taxpayer funds from misuse, regardless of the circumstances. Transparency and responsibility should be the top priorities.
While the pandemic presented extraordinary challenges, the alleged fraud scheme in Minnesota is unacceptable. Misusing hundreds of millions of dollars in relief funds is a betrayal of public trust and the purpose of these critical programs. I hope the investigations lead to meaningful reforms to strengthen oversight and accountability.
It’s alarming to see the scale of this alleged fraud scheme in Minnesota. Diverting hundreds of millions of dollars from critical pandemic relief programs is a serious abuse of the system. I hope the investigations uncover the full extent of the wrongdoing and lead to appropriate consequences.
Absolutely. Fraud of this magnitude undermines public trust and diverts resources away from those who genuinely need assistance. Rigorous oversight and swift action are necessary to address these issues and prevent similar abuses in the future.
The details around this alleged fraud scheme in Minnesota are truly staggering. Hundreds of millions of dollars diverted from critical relief programs is a massive abuse of taxpayer funds. Rigorous oversight and accountability are essential to prevent such egregious fraud in the future.
This is a concerning development. Misuse of pandemic relief funds is unacceptable, especially on such a massive scale. I hope the SBA and lawmakers can get to the bottom of this and hold those responsible accountable.
While the pandemic presented immense challenges, it’s disheartening to see these types of fraudulent activities take advantage of the situation. I’m glad to see lawmakers investigating this case thoroughly to understand what went wrong and how to strengthen safeguards moving forward.
It’s disheartening to see such a massive fraud scheme connected to pandemic relief funds in Minnesota. The diversion of hundreds of millions of dollars from these essential programs is a serious breach of the public’s trust. I hope the ongoing investigations can get to the bottom of this and lead to tangible measures to prevent similar abuses in the future.
This is a troubling revelation and a stark reminder of the importance of diligent oversight and accountability when it comes to the distribution of government relief funds. I hope the ongoing investigations can shed light on the full scope of this alleged fraud and lead to appropriate actions to prevent such egregious misuse of taxpayer money.