SBA Suspends 111,620 California Borrowers in $8.6B Fraud Sweep
SBA suspended 111,620 California borrowers tied to $8.6 billion in suspected PPP and EIDL fraud.
Overview
SBA Administrator Kelly Loeffler said the agency suspended 111,620 California borrowers tied to 118,489 Paycheck Protection Program and Economic Injury Disaster Loan loans totaling $8.6 billion.
The action targets suspected pandemic-era fraud and bars suspended borrowers from new SBA loans and certain federal contracting programs, the agency said.
California Attorney General Rob Bonta called the administration's claims "baseless" in a statement and Gov. Gavin Newsom's press office mocked the announcement in an X post, disputing federal responsibility for program administration.
The suspensions involve 111,620 borrowers and 118,489 loans totaling $8.6 billion and follow an SBA action that suspended 6,900 Minnesota borrowers tied to about 7,900 loans worth roughly $400 million, records show.
The SBA said it will work with federal law enforcement to identify and seek recoupment of stolen funds and warned investigations could expand to other states, officials confirmed.
Analysis
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Sources (6)
FAQ
Suspended borrowers are prohibited from receiving new SBA small business and disaster loans and are ineligible for other SBA programs, such as federal contracting in the 8(a) Business Development Program.
PPP loans are a COVID-era federal relief program providing funds to small businesses to keep workers on payroll, while EIDL loans offer low-interest disaster relief to businesses during crises like the pandemic.
California Attorney General Rob Bonta called the claims 'baseless,' and Gov. Gavin Newsom's press office mocked the announcement on X, disputing federal responsibility for program administration.
The SBA suspended 6,900 Minnesota borrowers associated with 7,900 potentially fraudulent PPP and EIDL loans worth approximately $400 million.
Examples include submitting fraudulent payroll records, falsified tax forms, loan stacking by applying for multiple loans for the same business, and filing applications for non-existent businesses or using stolen identities.
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