(NewsNation) — The Small Business Administration is halting annual funding to the state of Minnesota amid a report of over $100 million in fraud in the state.
Independent journalist Nick Shirley posted a 42-minute video to X, which has received over 119 million views, stating he had “uncovered over $110,000,000 (of fraud) in ONE day” after visiting multiple daycares in Minnesota.
In response, Kelly Loeffler, the administrator of the U.S. Small Business Administration, said Monday via X, “SBA is pausing annual funding to Minnesota while we investigate $430 million in suspected PPP fraud across the state.
“This Admin will not continue to hand out blank checks to fraudsters – and we will not rest until we clean up the criminal networks that have been stealing from American taxpayers.”
The Paycheck Protection Program was established by the 2020 CARES Act, which passed Congress and was signed into law by President Trump during the COVID-19 pandemic.
The House Committee on Small Business has launched a probe into “fraud and concealment” within the PPP and the Economic Injury Disaster Loan program, also formed during the pandemic.
Loeffler sent a letter last week to Democratic Minnesota Gov. Tim Walz outlining at least $2.5 million in PPP and EIDL loans sent to individuals indicted as part of a wide-ranging investigation into fraud involving Minnesota’s social services programs.
Walz’s office told NewsNation partner The Hill that it had “no role” in administering PPP and EIDL funds.
Federal prosecutors have charged 98 people in connection with their probe into fraud within Minnesota social programs, and Walz has ordered a third-party audit of billing for 14 high-risk programs under the Minnesota Department of Human Services.
In a social media post, FBI Director Kash Patel said recent federal prosecutions into the misuse of federal dollars meant for children’s hunger relief are “just the tip of a very large iceberg.”
NewsNation partner The Hill contributed to this report.