Trump administration reveals ‘shocking’ $8.6 billion in suspected California small business fraud

The federal Small Business Administration suspended 111,000 California borrowers after uncovering $8.6 billion in suspected fraudulent activity linked to the Covid pandemic, SBA Administrator Kelly Loeffler announced Friday.

“We have suspended approximately 112,000 borrowers tied to at least $9 billion in suspected fraud,” Loeffler said in a press release Friday. “This staggering number represents the most significant crack-down on those defrauding pandemic programs, and it exposes the scale of corruption the Biden administration has tolerated for years.”

The SBA reported that it suspended 111,620 California borrowers who received 118,489 Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) loans, totaling $8.6 billion.

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PPP loans were a COVID-era federal relief program that gave small businesses money to keep workers on the payroll, while EIDL loans are part of an SBA program that provides low-interest disaster relief loans to help businesses survive during disasters, including pandemics.

“Once again, the Trump SBA is taking decisive action to provide accountability in a state whose unresponsive welfare policies have created a culture of fraud and abuse at the expense of law-abiding taxpayers and small business owners,” Loeffler continued.

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The announcement came after California Attorney General Rob Bonta said Thursday that the Trump administration was promoting “baseless claims” of persistent fraud in the state.

“Trump claims California is wasting money when, in fact, our programs are helping low-income individuals and low-income families receive health care, food and housing assistance,” Bonta said Thursday.

“Trump’s claim is false, California is perpetuating fraud while we suffer,” he added.

Bonta’s office noted that California has seized about $2.7 billion in various fraud schemes over the past 10 years “including partnerships with the federal government.”

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Fox News Digital reached out to Bonta’s office Friday for further comment.

Newsom’s office directed Fox News Digital to the Governor Newsom Press Office X account, which mocked the SBA announcement.

“OMG. The Trump administration has found massive fraud in programs they control,” Newsom’s press office’s X account posted, linking to a New York Post exclusive on the announcement.

“The state has no role in running/administering these programs. Were they covering it up? California does not cover up fraud … we fight back. Almost 1,000 arrests + over $125 billion withheld under @CAGovernor Gavin Newsom.”

Loeffler continued that the alleged California fraud comes after the SBA suspended 6,900 borrowers in Minnesota related to potentially fraudulent PPP and EIDL loans, totaling nearly $400 million.

“As we did in Minnesota, we are actively working with federal law enforcement to identify criminals who defrauded American taxpayers, hold them accountable and recover stolen funds. As we continue our state-by-state work, our message is clear: Pandemic-era fraudsters will not get a pass under this administration,” Calleriff componia. Minnesota.

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Minnesota became ground zero for welfare and social services fraud around the pandemic in late 2025, when investigators uncovered widespread fraud schemes that could top $9 billion.

Original article source: Trump administration reveals ‘shocking’ $8.6 billion in suspected California small business fraud