Vance: 870,000 Borrowers Tied to $39 Billion in Suspected SBA Fraud Cut Off From Future Loans

Vice President JD Vance announced Monday in Kansas City that the Small Business Administration has suspended nearly 870,000 borrowers linked to an estimated $39 billion in suspected fraud in the Paycheck Protection Program and COVID-19 Economic Injury Disaster Loan program, barring them from future SBA loans and other agency benefits. SBA Administrator Kelly Loeffler said the new list covers 45 states, six territories, and the District of Columbia. Combined with earlier suspensions in five other states, she said the agency has now flagged borrowers tied to about $49 billion in suspected pandemic-era fraud nationwide. The event was held at the FBI’s Kansas City field office with Attorney General Todd Blanche and FBI Director Kash Patel.

“If you screwed the American taxpayer, the federal government is now going to say you’re cut off — no more,” Vance said. “You shouldn’t be applying anymore. And if you do apply, you’re no longer able to get those benefits.” He said pandemic programs created to keep workers on payroll and small businesses open were exploited by people who “decided to steal from the American taxpayer.” He added, “No fraud is too small. If you tried to steal money from the American taxpayer, if you took funds that ought by right have gone to American small businesses or American workers, not only are we going to cut you off, but we’re going to prosecute you.” Loeffler said exposing the cases was “only the first step” and that SBA referred $22 billion in suspected fraudulent pandemic loans to the Treasury Department for collection this summer. Suspended borrowers are barred from future small-business and disaster loans and from programs including 8(a) federal contracting. The action is administrative. Reporting on the rollout stated that the 870,000 have not been criminally convicted as a group.

The Justice Department separately described “Operation Heartland Surge,” a summer enforcement drive from June 12 through Sept. 1 involving prosecutors from 44 U.S. attorney’s offices and more than 20 federal and state partners. The department said the effort produced charges against nearly 80 people, additional guilty pleas, and about $245 million in intended losses. Blanche cited the case of Jamie Gray, charged with wire fraud and money laundering in an alleged scheme with nearly $56 million in intended losses. Prosecutors say Gray submitted PPP and EIDL applications claiming ownership of dozens of businesses that existed before the pandemic while operating one real firm called “Fur Lives Matter.” Vance said the administration has made nearly 90 prosecutorial decisions related to fraud in the past three months. A 10-year statute of limitations on pandemic-era fraud allows cases to proceed into the next decade.

The SBA inspector general’s office is starting “Operation No Doze,” under which suspected fraudulent PPP and COVID EIDL borrowers in Kansas and Missouri will receive a final 30-day demand letter. PPP was created in 2020 to help firms keep workers paid during shutdowns; EIDL offered disaster loans to businesses harmed by the pandemic. Inspectors general and auditors have documented widespread abuse in both programs since 2020, including fabricated payrolls, nonexistent firms, and proceeds spent on luxury goods and gambling. Monday’s suspensions follow a state-by-state SBA review. Vance was also scheduled for a MAGA Inc. campaign stop in Olathe, Kansas, with Sen. Roger Marshall. The White House did not release a borrower-level public list with the announcement.