‘We’re going state-by-state’: SBA chief announces nationwide crackdown on fraud in federal programmes

The head of the US Small Business Administration (SBA), Kelly Loeffler, says the agency is preparing a nationwide push to tackle fraud in federal programmes, promising investigations across all 50 states.Speaking on the podcast “Pod Force One,” Loeffler said the effort would focus on identifying misuse of taxpayer funds and supporting a federal initiative led by US vice president JD Vance.“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,” she said.The plan follows an announcement by US President Donald Trump during his February 24 State of the Union address, where he asked Vance to lead a “war on fraud” across federal programmes.Earlier, Vance had revealed that the administration planned to appoint a new Justice Department official. It was informally called the “fraud czar,” who would have nationwide authority to investigate and prosecute misuse of federal funds.Loeffler said the SBA has already begun examining several states for suspected misuse of funds. Her agency paused certain SBA loan activity in Minnesota late last year and has also investigated alleged misuse of taxpayer money in California. She described the two states as “very large offender states.”During the Covid-19 pandemic, the SBA distributed about $1.2 trillion through different programmes. Loeffler said roughly $200 billion of those funds were used fraudulently.Since taking office in February 2025, Loeffler said the SBA has tried to tighten oversight and reduce internal inefficiencies.“We started cracking down on all of it from the start,” she said. She added: “I mean, let’s just talk about government waste, 90% of our employees had been working from home for four years.”She said staff were ordered back to the office and that the agency workforce was majorly reduced.“I cut headcount by 54% in the first year, and yet we went on to set record volume for the agency in its 72-year history,” she said.The SBA chief said the agency’s crackdown is intended to ensure taxpayer money is properly managed.