Vice President JD Vance is expected to announce Monday that the Small Business Administration has suspended nearly 870,000 borrowers linked to an estimated $39 billion in suspected pandemic loan fraud, Politico reported.
Vance will make the announcement during an official visit to Kansas City, Missouri, according to the report. Attorney General Todd Blanche, FBI Director Kash Patel and SBA Administrator Kelly Loeffler are expected to join him.
The borrowers will be barred from future small-business loans, disaster loans and other SBA programs.
The suspensions stem from suspected fraud in the Paycheck Protection Program and the COVID-19 Economic Injury Disaster Loan program. None of the borrowers has been criminally convicted.
The action covers borrowers in 45 states, six territories and the District of Columbia. It follows a state-by-state review the agency has conducted over several months.
The SBA inspector general's office also plans to announce an effort called "Operation No Doze," under which suspected fraudulent PPP and EIDL borrowers in Kansas and Missouri will receive a final 30-day demand letter, Politico reported.
Both programs date to the CARES Act, the relief package Congress passed in March 2020. According to SBA figures, the two programs together disbursed more than $1 trillion before they closed.
In a June 2023 report, the SBA inspector general estimated that more than $200 billion in potentially fraudulent loans went out under the two programs.
Congress extended the statute of limitations for PPP and disaster loan fraud to 10 years under two bills signed in August 2022.
The SBA has barred pandemic borrowers from its programs before, in groups numbering in the hundreds and low thousands.
The agency has not said publicly what notice suspended borrowers receive, how they can contest a suspension or how long they have to respond.
The SBA did not immediately respond to a request for comment.
