President Donald Trump’s Small Business Administration (SBA) Administrator Kelly Loeffler has announced that the agency has suspended 111,620 borrowers in California over alleged fraud tied to taxpayer-funded pandemic-era loan programs.
According to a Friday SBA news release, those borrowers secured 118,489 Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL) totaling more than $8.6 billion.
Loeffler said the agency is “taking decisive action” to “deliver accountability in a state whose unaccountable welfare policies have created a culture of fraud and abuse.”
“Once again, the Trump SBA is taking decisive action to deliver accountability in a state whose unaccountable welfare policies have created a culture of fraud and abuse at the expense of law-abiding taxpayers and small business owners,” Loeffler said.
“Today, we announced we have suspended nearly 112,000 borrowers tied to at least $9 billion in suspected fraud.”
She continued:
“This staggering number represents the most significant crackdown on those who defrauded pandemic programs, and it illuminates the scale of corruption that the Biden Administration tolerated for years.”
“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.”
Loeffler Points to California and Minnesota Fraud Concerns
In a statement posted to X on Friday, Loeffler wrote that “California, just like Minnesota, invites criminals to abuse the system with socialist welfare policies.”
She added that fraud “scaled up massively during the pandemic – and the Biden Admin failed to stop it.”
“In San Diego, I visited a single address tied to 14 different ‘small businesses,’ that were formed during the pandemic, who received $2M+ in COVID-era loans that still haven’t been fully repaid,” she wrote, adding that “the era of abuse is over.”
Loeffler also stated that “under the Trump administration, any fraudster who broke the law will no longer get a free pass.”
🚨SBA suspends 111,620 California borrowers connected to $8.6 BILLION in suspected pandemic fraud:
California, just like Minnesota, invites criminals to abuse the system with socialist welfare policies. Fraud scaled up massively during the pandemic – and the Biden Admin failed… pic.twitter.com/fMlgPDYsNy
— Kelly Loeffler (@SBA_Kelly) February 6, 2026
Broader Crackdown on Fraud
In January, Loeffler similarly announced that the SBA had suspended thousands of borrowers in Minnesota over “suspected fraudulent activity” connected to pandemic-era lending programs.
Minnesota drew national attention in late 2025 after reports emerged of a massive pandemic-era relief and welfare fraud scheme in the state, in which the vast majority of those charged were of Somali descent.
Pandemic-era relief initiatives, including the PPP, have increasingly been identified as common targets for fraud in recent years.
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