Vice President JD Vance dropped a bombshell Monday: Biden administration officials knew about massive COVID loan fraud and did nothing.
The Justice Department and Small Business Administration announced a summer crackdown on pandemic-era loan fraud that produced enforcement actions against more than 160 defendants tied to approximately $245 million in intended losses to taxpayers.
But when Daily Wire White House Correspondent Mary Margaret Olohan asked Vance whether Biden officials were aware of the widespread Paycheck Protection Program fraud — and whether the fraud task force would investigate them — the vice president didn’t hesitate.
“THIS STUFF WAS GOING ON. OF COURSE, THEY DID. IT WAS AN OPEN SECRET.”
Vance said the fraud task force is now looking into whether Biden administration officials turned a blind eye. He recalled conversations with state officials during 2022 and 2023 who were frustrated the federal government wasn’t taking the fraud seriously.
Vance specifically mentioned then-Ohio Lieutenant Governor John Husted, now a U.S. senator, whom he said was “exasperated” that Washington wouldn’t act.
“Everybody knew people were skimming off the top,” Vance said. “Absolutely, we need to be looking into the officials who are turning a blind eye to this stuff.”
The announcement — dubbed “Operation No Doze” — represents the Trump administration’s aggressive pivot on pandemic fraud. Between June 12 and September 1, federal prosecutors obtained felony charges against nearly 80 defendants accused of causing approximately $100 million in intended losses.
Another roughly 43 defendants pleaded guilty in COVID-related SBA fraud cases involving approximately $44 million in intended losses, while approximately 40 defendants were sentenced in cases involving nearly $100 million in intended losses.
But the real number dwarfs the criminal cases: roughly 870,000 borrowers are being suspended from future access to SBA loans over suspected fraudulent activity — tied to approximately $39 billion in suspected fraud.
“If you screwed the American taxpayer, the federal government is now going to say you’re cut off, no more,” Vance said during the Kansas City press conference.
He framed the crackdown as essential to restoring trust in government spending.
“IF YOU’RE A TAXPAYER AND YOU WRITE A CHECK TO THE GOVERNMENT AND YOU HAVE NO CONFIDENCE THAT THE FEDERAL GOVERNMENT IS GOING TO PROTECT YOUR MONEY, WHY DO YOU PAY TAXES AT ALL?”
The cases announced Monday include some brazen schemes. Prosecutors in the Western District of Missouri charged Jamie Gray with allegedly attempting to obtain more than $55 million through hundreds of fraudulent loan applications.
Gray allegedly claimed to own dozens of businesses that existed before the pandemic — even though nearly all of them allegedly did not exist.
One purported business, called Fur Lives Matter, did exist. But people who actually worked there allegedly told investigators they had never heard of Gray.
Attorney General Todd Blanche, FBI Director Kash Patel, Small Business Administrator Kelly Loeffler, and Colin McDonald of the Fraud Task Force held a roundtable with federal and state partners at an FBI facility in Kansas City ahead of the announcement.
“The cavalry is here,” McDonald told the room.
Sen. Eric Schmitt (R-MO), who participated in the roundtable, emphasized the taxpayer cost of fraud.
“Fraud is not a victimless bookkeeping problem — it is organized theft on a national scale, and hardworking Americans continue to pay the price,” Schmitt said in a statement to The Daily Wire. “Every dollar stolen from the government came from an American taxpayer.”
The Paycheck Protection Program ultimately provided hundreds of billions of dollars to businesses during the pandemic, while the COVID Economic Injury Disaster Loan program provided additional assistance to businesses affected by the economic disruption.
The scale of the programs created an enormous target for fraudsters. The Government Accountability Office has previously found substantial problems with pandemic-relief fraud referrals, including incomplete, incorrect and duplicate information that complicated efforts to investigate suspected fraud.
SBA Administrator Kelly Loeffler said the agency is now sending demand letters to suspected fraudsters and referring debts to the Treasury Department for collection.
Vance made clear the Trump administration will no longer allow people suspected of defrauding federal programs to continue receiving government-backed loans. “If you were caught stealing from the American taxpayer, you shouldn’t be able to benefit from these loans anymore,” he said.
