More massive fraud has been uncovered in California following a major federal review of pandemic-era relief programs. Only a day after California Attorney General Rob Bonta dismissed claims of widespread fraud as “baseless,” the U.S. Small Business Administration announced it had identified an estimated $8.6 billion in questionable COVID-era loans tied to the state.
SBA Administrator Kelly Loeffler revealed Friday that more than 111,000 California borrowers have been suspended amid allegations of fraud connected to federal Paycheck Protection Program and Economic Injury Disaster Loan funds. These programs were designed to help small businesses survive the economic fallout of COVID-19, preserving jobs and stabilizing local economies during unprecedented shutdowns.
According to the SBA, the suspended borrowers are accused of improperly collecting relief money intended for legitimate business expenses. Loeffler described the findings as historic in scope, calling them “the most significant crack-down on those who defrauded pandemic programs,” and said the results highlight what she characterized as years of tolerated corruption.
Federal officials say they are now actively coordinating with law enforcement agencies to identify individuals involved, pursue criminal accountability, and recover misused taxpayer funds. The SBA emphasized that similar reviews are underway nationwide, signaling a broader enforcement push beyond California.
“This message is clear,” Loeffler said, noting that pandemic-era fraud will not be overlooked. As investigations continue, the revelations have intensified debate over oversight failures, accountability, and the long-term consequences of rushed emergency spending during the height of the COVID crisis.