KANSAS CITY, MO – September 14, 2026 (STL.News) Vice President JD Vance announced a sweeping federal crackdown on pandemic-era fraud Monday in Kansas City, Missouri, including the permanent suspension of nearly 870,000 borrowers from future Small Business Administration loans and programs over an estimated $39 billion in suspected fraud.
Vance made the announcement at the FBI’s Kansas City Field Office alongside Attorney General Todd Blanche, FBI Director Kash Patel, SBA Administrator Kelly Loeffler, Missouri Gov. Mike Kehoe, U.S. Sen. Eric Schmitt and other federal and state officials.
The announcement combines administrative sanctions against hundreds of thousands of borrowers with an expanding Justice Department effort to prosecute alleged fraud involving the Paycheck Protection Program, or PPP, and the COVID Economic Injury Disaster Loan program.
“If you screwed the American taxpayer, the federal government is now going to say you’re cut off, no more,” Vance said during Monday’s event.
The nearly 870,000 borrowers are connected to an estimated $39 billion in suspected fraud across 45 states and territories, according to Loeffler.
Combined with earlier enforcement actions covering five states, the SBA says it has now suspended borrowers linked to about $49 billion in suspected fraud nationwide.
The suspensions prevent affected borrowers from receiving future SBA-backed small-business and disaster loans and participating in certain other SBA programs, including the agency’s 8(a) federal contracting program.
The action does not mean all 870,000 borrowers have been criminally convicted of fraud.
The suspensions are administrative actions based on suspected fraudulent activity the government identified. Criminal cases require separate investigations and prosecutions, and defendants charged with crimes are presumed innocent unless proven guilty in court.
Missouri and Kansas Become Enforcement Starting Point
Missouri isn’t simply serving as the location for Monday’s announcement.
Federal officials also announced Operation No Doze, a new SBA Office of Inspector General initiative beginning in Missouri and Kansas.
Under that operation, suspected fraudulent PPP and COVID EIDL borrowers will receive final 30-day demand letters as the government seeks repayment of outstanding pandemic-era debt.
Cases may also be referred for criminal prosecution when investigators believe the evidence warrants charges.
That makes Missouri one of the starting points for the government’s next phase of pandemic-fraud enforcement.
The SBA has already referred more than 560,000 suspected fraudulent borrowers associated with approximately $22.2 billion in delinquent PPP and COVID EIDL loans to the U.S. Treasury Department for collection.
Loeffler said Monday that identifying suspected fraud is only the beginning of the government’s effort to recover taxpayer money.
Heartland Fraud Surge Targets More Than 160 Defendants
The administration also disclosed results from a separate nationwide Justice Department enforcement initiative described as the Heartland Fraud Surge.
The operation ran from June 12 through Sept. 1 and involved prosecutors from 44 U.S. Attorney’s Offices and more than 20 federal and state investigative partners.
Federal officials said enforcement actions involved more than 160 defendants and approximately $245 million in intended taxpayer losses.
Nearly 80 defendants faced felony charges in cases involving approximately $100 million in intended losses connected to SBA pandemic programs.
Another approximately 43 defendants pleaded guilty in cases involving roughly $44 million in intended losses.
About 40 defendants were sentenced in cases involving nearly $100 million in intended losses.
Those categories represent different stages of the criminal justice process and should not be treated interchangeably.
An indictment or criminal charge is an accusation, while a guilty plea or conviction establishes criminal responsibility.
Missouri Case Allegedly Involved Nearly $56 Million
One case highlighted during Monday’s announcement originated in the Western District of Missouri.
Federal prosecutors charged Jamie Gray with wire fraud and money laundering in an alleged scheme involving nearly $56 million in intended losses.
Prosecutors allege Gray submitted PPP and COVID EIDL applications claiming ownership of dozens of businesses that purportedly existed before the pandemic.
According to the government’s allegations, nearly all of those businesses were not operating before the eligibility deadline.
One business cited by prosecutors, called Fur Lives Matter, apparently existed but allegedly had no connection to Gray.
The allegations against Gray have not been proven at trial, and the defendant is presumed innocent unless and until proven guilty.
The case illustrates the type of conduct federal authorities say they are continuing to investigate years after the pandemic lending programs ended.
How the Pandemic Programs Became Fraud Targets
Congress created the Paycheck Protection Program in March 2020 as businesses across the country were forced to close or dramatically reduce operations during the COVID-19 pandemic.
The objective was to move enormous amounts of federal assistance into the economy quickly enough to prevent businesses from collapsing and workers from losing their jobs.
Approximately 11.8 million PPP loans totaling about $800 billion were ultimately issued.
PPP loans could be forgiven when borrowers complied with program requirements, including restrictions governing how the money could be spent.
The COVID Economic Injury Disaster Loan program provided another enormous source of federal assistance.
Together, PPP and COVID EIDL distributed approximately $1.2 trillion, according to figures cited by federal officials.
The unprecedented speed and scale of those programs created significant vulnerabilities.
Government watchdogs later concluded that safeguards and fraud-detection systems weren’t sufficiently developed during the programs’ critical early stages.
The SBA inspector general has estimated that more than $200 billion distributed through PPP and COVID EIDL showed indicators of potential fraud.
That number does not mean the government has proven that every dollar was fraudulently obtained. It represents an inspector general estimate based on fraud indicators and data analysis.
Years Later, Investigations Continue
A central question surrounding Monday’s announcement is why the federal government is still uncovering pandemic fraud more than five years after it established the lending programs.
One reason is the programs’ sheer scale.
Millions of applications were processed as the government attempted to get emergency money to businesses rapidly.
Another issue was the quality of information available to investigators.
A March 2025 Government Accountability Office report found that about 2 million of nearly 3 million pandemic-loan fraud referrals contained incomplete, incorrect, or duplicative information, making it harder for investigators to build prosecutable cases.
Congress has also given investigators considerably more time.
The statute of limitations for certain PPP and COVID EIDL fraud offenses was extended to 10 years.
That means additional pandemic-loan prosecutions could continue into 2030 and 2031.
Attorney General Blanche said Monday that federal prosecutors now have additional resources to pursue cases that previously might not have received sufficient investigative attention.
The Justice Department has prosecutors throughout all 93 U.S. Attorney’s Offices focused on fraud enforcement.
Federal Government Expands Fraud Infrastructure
Pandemic-loan investigations are part of a much larger federal anti-fraud initiative.
The Justice Department announced the creation of its National Fraud Enforcement Division earlier this year.
The division focuses on investigating and prosecuting fraud against individuals and government programs and supports the broader White House Task Force to Eliminate Fraud, chaired by Vance.
The administration also established a National Fraud Detection Center designed to analyze information across federal agencies and identify suspicious patterns that might otherwise remain hidden in separate government databases.
The White House said in August that its broader anti-fraud task force had identified nearly $230 billion in fraud, prevented approximately $56 billion in allegedly fraudulent payments and enforced more than $55 billion through indictments, settlements and civil penalties.
Those are administration-reported figures and should not be interpreted as an independent audit of federal fraud losses or recoveries.
Fraud Enforcement Extends Beyond Pandemic Loans
The Missouri announcement comes amid broader federal efforts targeting fraud involving government benefit programs.
The Justice Department’s 2026 National Health Care Fraud Takedown announced charges against 455 defendants nationwide involving approximately $6.5 billion in alleged false claims.
Missouri cases were included in that enforcement initiative.
The U.S. Attorney’s Office for the Western District of Missouri said the cases included alleged schemes involving Medicaid fraud, forged credentials, and other conduct affecting government healthcare programs.
Federal authorities have increasingly described fraud involving government programs as both a criminal justice issue and a threat to the long-term financial sustainability of taxpayer-funded programs.
Every dollar lost to a fraudulent claim is money unavailable for legitimate businesses, patients, workers or beneficiaries.
Legitimate Businesses Were the Intended Beneficiaries
The enormous scale of suspected PPP and EIDL fraud matters because the programs were created during an economic emergency.
Thousands of legitimate businesses were struggling to survive as government restrictions, consumer behavior, and public-health concerns disrupted the economy.
PPP was intended to keep workers employed and businesses operating.
Companies that legitimately received and used the loans according to program requirements shouldn’t be confused with borrowers accused of manipulating the system.
Federal authorities allege some applicants instead created fictitious businesses, fabricated payroll figures, submitted false tax information, stole identities or misrepresented business revenue to obtain money for which they weren’t eligible.
Investigators are also examining whether larger networks of brokers, application preparers and other participants helped multiple borrowers submit fraudulent applications.
Suspension Doesn’t Equal Conviction
The distinction between suspected fraud, administrative suspension and criminal conviction is especially important given the extraordinary number announced Monday.
Nearly 870,000 borrowers are being permanently suspended from future SBA programs.
That does not mean the Justice Department has criminal cases against 870,000 people.
The SBA can impose administrative restrictions based on its own program rules and findings.
Criminal prosecution requires a separate evidentiary process.
Similarly, the government’s estimate that the newly suspended borrowers are connected with approximately $39 billion in suspected fraud doesn’t establish that courts have determined all $39 billion was stolen.
Those distinctions matter both legally and financially.
Monday’s announcement shows the scale of activity the federal government has identified as sufficiently suspicious to warrant exclusion from future SBA assistance.
Why Missouri Matters
The decision to announce the crackdown in Kansas City gives Missouri an important role in the administration’s broader fraud-enforcement strategy.
The Heartland enforcement initiative includes a major Western District of Missouri prosecution, while Operation No Doze will begin its collection and referral efforts in Missouri and neighboring Kansas.
That makes the story particularly relevant for Missouri businesses and taxpayers.
Legitimate small businesses depend on SBA lending programs for financing, disaster assistance and access to federal contracting opportunities.
Fraud can increase scrutiny, slow legitimate applications and undermine public confidence in programs intended to support entrepreneurs and employers.
The crackdown also raises questions about how federal agencies can prevent another fraud problem of this magnitude during the next national emergency.
Recovering stolen or improperly obtained money years later is considerably more difficult than preventing fraudulent payments from leaving the Treasury in the first place.
Pandemic Fraud Cases Could Continue for Years
More than six years after the COVID-19 pandemic began, the financial consequences of the government’s emergency response remain unresolved.
PPP and EIDL helped keep legitimate businesses alive during an unprecedented economic shutdown.
But the programs also distributed enormous sums at extraordinary speed, creating opportunities for fraud that investigators are still attempting to untangle.
Monday’s announcement suggests the government is far from finished.
Nearly 870,000 borrowers are being barred from future SBA programs.
Approximately $39 billion in suspected fraud is connected with the newly announced suspensions.
More than 160 defendants were involved in the Heartland Fraud Surge.
Those criminal enforcement actions were associated with approximately $245 million in intended taxpayer losses.
Missouri and Kansas will now become the starting point for another effort to collect delinquent pandemic loans and refer potentially criminal cases for prosecution.
The emergency lending programs may have ended years ago.
The effort to determine where the money went—and recover taxpayer dollars allegedly obtained through fraud—is continuing.
Legal notice: Criminal charges and allegations described in this report are accusations only. Defendants are presumed innocent unless and until proven guilty in court. SBA administrative suspensions based on suspected fraud do not constitute criminal convictions.
