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SBA Administrator Kelly Loeffler said Friday that the massive fraud uncovered in Minnesota is only the beginning and warned that criminal prosecutions are coming nationwide. Loeffler made the remarks during an appearance on Fox News Channel’s “Hannity,” which was guest-hosted by Jason Chaffetz, Breitbart reported.
“You’re right,” Loeffler said when asked about the scope of the fraud. “It’s a ton of money and it’s just the tip of the iceberg happening in Minnesota.”
She said investigators initially believed the fraud totaled roughly $1 billion but now know the figure is significantly higher.
Loeffler said her team uncovered $3 million in fraud within three days after launching a review of SBA loans during Thanksgiving weekend.
She said investigators identified roughly 7,900 fraudulent loans involving about 6,900 individuals.
Loeffler said some individuals took out multiple loans and have now been permanently banned from doing business with the Small Business Administration.
“They will not get a disaster loan,” she said. “They cannot get SBA funding.”
Loeffler said the SBA will turn its findings over to federal authorities.
“We’re going to see people in handcuffs,” she said. “We’re going to see people in jail.”
Republican challenger John Nagel is accusing Democratic Rep. Ilhan Omar of being closely linked to the $1 billion Feeding Our Future fraud scandal, which is based in her Minneapolis congressional district. Nagel, who is running against Omar in Minnesota’s 5th Congressional District, claims that legislation introduced by Omar contributed to the circumstances that allowed the fraud to take place.
“Where did this actually start?” Nagel said, Townhall reported. “She passed legislation. Her legislation actually started it, and it allowed people to get into Feeding Our Future.” Nagel pointed to the geographic concentration of the fraud.
“If you look at where the fraud is, it’s primarily her district, the district that I’m running in against her,” he said. “And it’s really odd to think that all the fraud just happened in a particular area.”
Omar introduced the Maintaining Essential Access to Lunch for Students Act, known as the MEALS Act, during the COVID-19 pandemic. The bill allowed states to provide free meals to children during school closures through alternative methods such as grab-and-go distribution and eased eligibility requirements. Omar has denied any wrongdoing.
The legislation was passed by Congress with bipartisan support.
Nagel further alleged that individuals connected to Omar’s political circle financially benefited from the fraud scheme. He said Omar held campaign events at Safari Restaurant, a business tied to the Feeding Our Future investigation, and claimed she had personal familiarity with one of the restaurant’s owners who has since been convicted.
Nagel also asserted that Omar previously employed a staff member who was later convicted in connection with the case. Omar has not publicly addressed those specific allegations.
Last week, Sen. Tommy Tuberville, R-Ala., spoke on the Senate floor Thursday about a large fraud scheme uncovered in Minnesota involving nonprofit organizations linked to the state’s Somali community.
During his remarks, Tuberville accused Minnesota Gov. Tim Walz and Omar of failing to prevent the fraud and of defending individuals involved in the scheme. Federal prosecutors have said the case involves the misuse of hundreds of millions of dollars in public funds through child nutrition and other assistance programs.
“Fox News recently reported that members of Minnesota Democratic Representative Ilhan Omar’s inner circle, people working for her, were personally profiting from this fraud,” Tuberville said. “Omar held at least one event at one of the restaurants named in the massive fraud scheme. And by the way, one of Congresswoman Omar’s staffers has already been convicted for his role in the fraud. It runs very deep.”
“All of this has taken place inside of Omar’s congressional district, and she’s doing everything she can to defend these Somali criminals,” he added.
