The federal government has suspended roughly 870,000 people and businesses suspected of defrauding pandemic-era loan programs, barring them from ever receiving federal small-business or disaster loans again, officials announced Monday at a press briefing in Kansas City.
Vice President JD Vance made the announcement alongside Attorney General Todd Blanche, FBI Director Kash Patel and Small Business Administration Administrator Kelly Loeffler. The suspended borrowers are tied to an estimated $39 billion in suspected fraud and come from 45 states, six U.S. territories and the District of Columbia.
Vance said the scale of the fraud had long been known inside the prior administration.
“Did the Biden Administration know this stuff was going on? Of course they did! It was an open secret.”
Blanche detailed criminal charges tied to a separate Justice Department initiative called Heartland Fraud Surge, which ran from June 12 through Sept. 1 and involved dozens of U.S. attorneys’ offices and more than 20 federal and state investigative partners.
“The paycheck protection program, program which the vice president just talked about, was run by the SBA. It was created to save jobs and keep good American businesses alive during COVID. But some fraudsters treated it like a personal piggy bank. The DOJ, the FBI, the small business administration, and their great Office of Inspector General, saw this happening, and now we’re looking to, every day, fix it.”
Blanche said the operation, covering less than two months, uncovered approximately $245 million in losses and resulted in charges against more than 80 individuals.
“There’s a lot of people that have been implicated or charged, but so far, we’ve charged over 80 individuals tied to this theft of 245 million dollars.”
Loeffler said the suspensions announced by Vance are tied to an estimated $39 billion in suspected fraud across 45 states and territories. Combined with earlier enforcement actions, she said the SBA has now suspended borrowers connected to roughly $49 billion in alleged fraud spanning all 50 states.
The Paycheck Protection Program and the Economic Injury Disaster Loan program were created early in the pandemic to keep businesses afloat and workers employed during widespread lockdowns, including extended closures in states such as California. Officials have separately estimated that suspected fraud across those two programs alone could total roughly $200 billion.
Add comment