SBA launches ‘War on Fraud’ investigating $50B of waste
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Kelly Loeffler announced that the Small Business Administration will work with Vice President JD Vance’s fraud task force to launch a 50-state crackdown on federal benefit fraud.The initiative targets a nearly $50 billion programme that has never been audited and is described as rife with waste and fraud, with a state-by-state approach that goes beyond COVID-era programs. The plan is part of a broader push to combat fraud across the federal government, including the creation of a Justice Department Fraud Division led by Colin McDonald. The crackdown is already taking shape in actions such as pausing SBA grants in Minnesota after a major fraud scheme and suspending some Medicaid funding there. The effort aligns with federal watchdogs’ warnings about significant fraud losses-estimated by the Government Accountability Office at roughly $233 billion to $521 billion annually. President Trump has framed this as a national “war on fraud,” emphasizing accountability for taxpayer funds.
SBA launches new $50 billion ‘war on fraud’ program
The Small Business Administration will collaborate with Vice President JD Vance‘s task force for a 50-state crackdown targeting federal benefit fraud, Secretary Kelly Loeffler announced Wednesday.
“We are going to go state-by-state … We have other programs. This isn’t just [the] COVID era that we’re looking at, but we are going to make sure that we contribute meaningfully to Vice President [JD] Vance’s fraud task force that he is heading up, which is so important to the American people,” Loeffler said in an interview with the New York Post.
Loeffler said the SBA is already investigating an almost-$50-billion program that has never been audited and is “rife with waste and fraud.”
“No one had ever thought to audit the program,” she said.
The push comes as the Trump administration has made combating fraud across the federal government a broader priority.
During last month’s State of the Union address, President Donald Trump declared a “war on fraud.” He tapped Vance to lead the effort.
“This is the kind of corruption that shreds the fabric of a nation, and we are working on it like you wouldn’t believe,” Trump said in the address.
Earlier this year, Trump also tapped Colin McDonald to serve as the inaugural head of the Justice Department’s Fraud Division, a role informally dubbed the “fraud czar.”
The administration has already taken action in several states.
In December, Loeffler announced she was halting all SBA grants to Minnesota after a major fraud scheme involving members of the Somali community was discovered. In February, Vance announced that the Trump administration was pausing some Medicaid funding to Minnesota over concerns of fraud in the state.
The SBA crackdown comes as the Trump administration has focused more broadly on mitigating fraud across the federal government.
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Federal watchdogs have long warned about widespread fraud in government programs. Earlier this year, the Government Accountability Office estimated that the government loses between $233 billion and $521 billion annually due to fraud, based on data from fiscal years 2018 through 2022.
“[The American people] work so hard, they pay taxes to the federal government, and it’s our job to be a good steward of those taxes,” Loeffler told the Post. “We have to make sure that we have accountability for those that came here to abuse them, or those that make a living off abusing taxpayer funds.”
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