SBA launches probe into Somali groups in Minnesota over possible COVID fraud ties

MINNEAPOLIS — The Small Business Administration has ordered an investigation into a network of Somali organizations in Minnesota linked to a sprawling $1 billion COVID-19 fraud scandal, spotlighting accusations of oversight lapses under Gov. Tim Walz’s administration.

SBA Administrator Kelly Loeffler announced the probe on social media Tuesday, saying numerous indicted individuals and nonprofits — including the Feeding Our Future group — received Paycheck Protection Program loans on top of state and federal aid. “I have ordered an investigation into the network of Somali organizations and executives implicated in these schemes,” Loeffler wrote.

The agency will examine eligibility issues, including citizenship status and the legitimacy of nonprofit activities, an SBA spokesperson said. “The agency ... remains committed to clawing back all funding that was illegally obtained on behalf of American taxpayers,” spokesperson Maggie Clemmons added.

The announcement follows separate investigations by the House Oversight Committee and the U.S. Treasury Department into whether Walz’s team ignored warnings about fraud in child nutrition and social services programs, allegedly allowing more than $1 billion in taxpayer money to be stolen. Prosecutors say 59 people, mostly from Minnesota’s Somali community, have been convicted so far in schemes that billed for nonexistent services.

Whistleblowers from the state Department of Human Services have accused Walz’s administration of retaliating against those who raised red flags, including through threats and discrediting efforts. A 2015 congressional report found Minnesota produced more ISIS foreign fighters than any other state, some of whom were described as adept at exploiting welfare benefits.

Walz, the Democrats’ 2024 vice-presidential nominee, has welcomed federal scrutiny but questioned its motives. “If they want to help us, I welcome that. Do an investigation, find out,” he said of a potential Treasury probe into possible diversions to the terrorist group al-Shabaab. “But I don’t think anybody really believes their motive or timing is about actually doing something about this.”

The governor’s office did not immediately respond to requests for comment on the SBA investigation.

Similar fraud has surfaced elsewhere, including a New York nail salon scheme that allegedly smuggled Vietnamese immigrants and misappropriated $13 million in PPP funds, and an Iowa ring involving over 100 Cuban immigrants that stole $2.4 million, leading to convictions for wire fraud and money laundering

--REAL AMERICAS VOICE

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