The move comes after the agency similarly suspended federal funding to Minnesota due to widespread fraud.
The Small Business Administration (SBA) announced that federal funding would be frozen for hundreds of thousands of California borrowers while allegations of fraud are investigated. The agency stated that these borrowers received 118,489 Paycheck Protection Program and Economic Injury Disaster Loans under pandemic-era programs.
“We have suspended nearly 112,000 borrowers tied to at least $9 billion in suspected fraud. This staggering number represents the most significant crack-down on those who defrauded pandemic programs,“ Administrator Kelly Loeffler said. “As we did in Minnesota, we are actively working with federal law enforcement to identify the criminals who defrauded American taxpayers, hold them to account, and recoup the 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.“
The agency explained, “Suspended borrowers are prohibited from executing new small business and disaster loans and are not eligible for other SBA programs such as federal contracting in the 8(a) Business Development Program.“
As the Lord Leads, Pray with Us…
- For Administrator Loeffler to be prudent in her leadership of the Small Business Administration.
- For discernment for SBA officials as they investigate the pandemic-era defrauding of federal programs.
Sources: Small Business Administration, Red State, Fox News
