NEWYou can now listen to Fox News articles!
When the news broke of convictions for rampant fraud across several pandemic programs in Minnesota, the $1 billion price tag and over 90 indictments were staggering. We now know this is a very low estimate of the price Americans have paid to fund deeply corrupt state-administered welfare programs.
The criminal nature of the scandal rocked the country: a vast network of Somali nonprofits systematically ripped off federal programs and denied Minnesota families of vital services at the height of the pandemic. In defrauding programs for nutrition, education and health care, the massive and sophisticated enterprise siphoned billions in taxpayer dollars.
Thanks to lax oversight under Democrat Tim Walz, the governor of Minnesota, organized crime crept in and then brazenly flourished. Even when dozens of whistleblowers repeatedly raised concerns to state oversight bodies and to his own office, Walz simply blamed racism and shrugged off the allegations.
The governor recently defended the state’s "generosity" which allowed Somali fraudsters to purchase luxury cars, homes and vacations at the expense of hungry Minnesotans. Its welfare state is widely considered a magnet for those seeking to become beneficiaries. Alarmingly, welfare is now the state’s single-largest annual expenditure — higher than education, highways, and public safety.
Minnesota locations accused of fraudulent claims were investigated by Fox News Digital, uncovering vacant lots and non-existent suites. (Nikolas Lanum/Andrew Mark Miller/Fox News Digital)
But new investigations have revealed that fraud runs much deeper than initially suspected, including at the U.S. Small Business Administration (SBA).
During the pandemic, the agency issued $1.2 trillion in loans, helping save millions of small businesses and jobs. Much of that lending was legitimate, and many of the loans were forgiven, consistent with the 2020 CARES Act legislation. But the program was expanded in 2021 and became rife with fraud — at least $200 billion, most of which went completely unaddressed and largely forgiven under the Biden administration.
At my direction, SBA launched an investigation into the Minnesota fraudsters. It took just days to find about $3 million in Paycheck Protection Program (PPP) loans and COVID-19 Economic Injury Disaster Loans (EIDL) for numerous indicted nonprofits, including groups like Feeding our Future and Action for East African People.
With this disproportionate level of possible fraud – and ongoing allegations arising across other federal programs – we broadened our scope to investigate every COVID-19 loan granted in Minnesota. In a matter of weeks, we uncovered a staggering 13,600 PPP loans that were flagged for fraud but later approved, totaling about $430 million in potentially fraudulent funds that should have been used to save Main Street jobs and businesses. In many cases, the loans were forgiven entirely.
SOCIAL MEDIA ERUPTS AFTER MINNESOTA AG POSTS ABOUT CRACKING DOWN ON FRAUD: 'YOU'RE KIDDING RIGHT?'
On Dec. 23, I informed the governor that SBA has halted about $5.5 million in annual funding to Minnesota pending further review, in an effort to prevent taxpayer dollars in a state that clearly lacks appropriate controls to responsibly steward federal funds. And we are actively working with our law enforcement partners to hold criminals accountable for the possible pandemic-era fraud now under investigation.
One thing is clear: the sheer breadth of fraud in Minnesota proves that the abuse of federal dollars is endemic to the state’s welfare system — and the logical consequence of socialist programs designed to pump out funding without accountability. Other states should be on notice.
The U.S. Department of Treasury now has reason to believe that some of the stolen pandemic funds went to fund al-Shabaab, the al-Qaeda-backed terror wing of Somalia. The U.S. Department of Agriculture has asked the state to recertify many SNAP recipients. Prosecutors believe at least half of the state’s $18 billion spent on Medicaid and related programs since 2018 was fraudulent.
CLICK HERE FOR MORE FOX NEWS OPINION
Americans have always known that welfare results in some level of fraud, but in Minnesota — where socialist welfare "generosity" is not a safety net, but a way of life - criminal activity has taken root at an industrial scale.
In a matter of weeks, we uncovered a staggering 13,600 PPP loans that were flagged for fraud but later approved, totaling about $430 million in potentially fraudulent funds that should have been used to save Main Street jobs and businesses.
Accountability must be the result of these government-wide investigative efforts, including subpoenas, prosecutions, restitution and jail time. But given the egregious failures on display in states like Minnesota, new welfare controls on federal programs, like the work requirements included in the One Big Beautiful Bill, look especially prescient and urgent.
CLICK HERE TO DOWNLOAD THE FOX NEWS APP
With over 80 federal welfare programs that spend $1 trillion annually, there is much work to do. The Trump administration is aggressively pursuing bad actors and implementing reforms to protect welfare programs for real American families who need it — while also ensuring it is a lifeline, not a lifestyle.
Leaders in Minnesota have not been interested in or capable of meeting that mission, and the developing scandals raise serious questions about what may be going on in states like California and Illinois. The Trump administration is committed to exposing welfare abuse everywhere it exists — and enforcing accountability in states that have allowed fraud to fester at the expense of law-abiding Americans and taxpayers.
Kelly Loeffler is the 28th administrator of the U.S. Small Business Administration. She is an entrepreneur, executive, philanthropist and former U.S. senator from Georgia.
