The U.S. Small Business Administration said Friday it has suspended more than 100,000 California borrowers amid suspected fraud tied to pandemic-era relief programs, a move the agency said represents one of the largest enforcement actions since Covid-19 aid was rolled out.

111,620 California borrowers were linked to suspected fraudulent activity involving Paycheck Protection Program and Economic Injury Disaster Loan funds. Those borrowers received 118,489 loans totaling more than $8.6 billion, according to the agency.

SBA Administrator Kelly Loeffler said the action reflects a broader crackdown on abuse of emergency lending programs created during the pandemic. “Once again, the Trump SBA is taking decisive action to deliver accountability in a state whose unaccountable welfare policies have created a culture of fraud and abuse at the expense of law-abiding taxpayers and small business owners,” Loeffler said in a statement.

The programs were designed to help businesses stay afloat during pandemic shutdowns - however both have been plagued by fraud since their rapid deployment, prompting years of investigations by federal watchdogs and law-enforcement agencies.

The California action follows a similar enforcement effort announced last month in Minnesota, where the SBA said it suspended 6,900 borrowers after identifying what it described as widespread suspected fraud. In that review, the agency flagged nearly $400 million in potentially fraudulent PPP and EIDL loans tied to about 7,900 approvals during the pandemic, according to Loeffler. 

“As we did in Minnesota, we are actively working with federal law enforcement to identify the criminals who defrauded American taxpayers, hold them to account and recoup the stolen funds,” Loeffler said. “As we continue our state-by-state work, our message is clear: Pandemic-era fraudsters will not get a pass under this administration.”

The SBA has previously said at least $2.5 million in PPP and EIDL funds were linked to a Somali-connected fraud scheme based in Minneapolis, underscoring how organized networks exploited gaps in oversight as billions of dollars were rushed out the door during the public-health emergency.

Loeffler said the scale of the California suspensions highlights what she characterized as years of insufficient enforcement. The announcement criticized what she described as tolerance of fraud under the Biden administration, while framing the current actions as part of a renewed push under the Trump administration to recover misspent funds and pursue criminal accountability.

The SBA said its review of pandemic lending is ongoing, with additional state-by-state actions expected as investigations continue.