The Trump administration is to suspend roughly 870,000 people suspected of pandemic loan fraud from receiving future government-backed loans, Vice President JD Vance has announced.
Speaking in Kansas City, Missouri, Vance said people who had stolen taxpayer money should no longer be eligible for federal lending programmes.
“If you screwed the American taxpayer, the federal government is now going to say you’re cut off, no more,” he told reporters. “You shouldn’t be applying anymore, and if you do apply, you’re no longer able to get those benefits.”
His announcement coincided with the Justice Department revealing the results of a nationwide crackdown on alleged fraud linked to Covid-era small business support schemes.
The operation, known as the “Heartland fraud surge”, ran from 12 June to 1 September and involved more than 160 defendants. Prosecutors said the cases represented approximately $245 million (£182 million) in intended losses to taxpayers.
Nearly 80 defendants faced felony charges in cases involving about $100 million in alleged losses connected to Small Business Administration programmes, including the Paycheck Protection Programme (PPP) and the Economic Injury Disaster Loan scheme.
A further 43 defendants pleaded guilty in cases involving roughly $44 million in intended losses, while about 40 people were sentenced in cases involving nearly $100 million, the Justice Department said.
The alleged schemes included fabricated businesses, false payroll and revenue information, and identity theft. Prosecutors from 44 US Attorney’s Offices took part, alongside more than 20 federal and state investigative partners.
Covid loan fraud crackdown
Attorney General Todd Blanche said about 500 prosecutors in Washington and across the country were now focused on such cases, with prosecutors in all 93 US Attorney’s Offices directly involved.
“What we’re saying now is, yes, you do. You do have the time. You do have the resources. You need to take that case and investigate it,” Blanche said, explaining why cases involving loans issued several years ago were still being pursued.
The PPP was established in March 2020 to help businesses withstand widespread coronavirus restrictions and economic disruption. Banks and other lenders ultimately issued about 11.8 million loans worth approximately $800 billion before the programme stopped making new loans in 2021.
The loans could be forgiven if borrowers met requirements, including using the money for payroll and other eligible expenses. However, government safeguards were not fully in place as applications surged.
Expanded automated screening and reviews were introduced only in January 2021, after more than $525 billion in PPP loans had been approved, according to the Government Accountability Office.
The Small Business Administration’s inspector general estimated in 2023 that more than $200 billion distributed through the PPP and the separate disaster-loan programme showed signs of potential fraud. Congress extended the time limit for bringing cases involving pandemic-related fraud to 10 years, allowing prosecutors to pursue further cases until 2030 or 2031.
Cases announced in Missouri and Iowa
Among the cases highlighted by the Justice Department was that of Jamie Gray, who was charged in Missouri with wire fraud and money laundering over an alleged scheme involving nearly $56 million in intended losses.
Prosecutors allege Gray submitted PPP and disaster-loan applications claiming ownership of dozens of businesses that had supposedly existed before the pandemic. They say nearly all were not operating by the relevant eligibility deadline and that information about ownership, employees, revenue and operations was fabricated.
In Iowa, Adrian Rafael Pupo Perez and Helen Yaima Leyva Santiesteban were indicted on 47 counts of wire fraud, money laundering and conspiracy.
They are accused of participating with more than 100 other people in a scheme involving about 470 fraudulent PPP applications submitted in the names of people across the country. Prosecutors allege the group sought more than $4.5 million, of which approximately $2.4 million was paid out. Both defendants are wanted, according to the Justice Department.
The Western District of Missouri has led a number of pandemic-relief prosecutions this year, including cases involving allegedly fabricated payroll figures, false tax documents and the use of PPP funds for personal expenses.
Deputy Attorney General Colin McDonald said the United States had carried out more than 1,200 major fraud actions during the previous 160 days. The Justice Department has also created a National Fraud Detection Centre to analyse data held by separate government agencies.
A Government Accountability Office report published in March 2025 found that about two million of nearly three million pandemic-loan fraud referrals contained incomplete, inaccurate or duplicated information, limiting investigators’ ability to pursue cases.
McDonald said the department would continue expanding its fraud task force, while Blanche said the arrests and prosecutions were saving taxpayers “millions and millions and millions of dollars”.
