Of 300 applications to Hennepin County’s new small-business recovery fund, 82 passed muster. The rest did not, and the county has now stopped processing them.
The Small Business Recovery Fund was set up in March with $2 million. Businesses that said Operation Metro Surge had hurt them could apply for grants of $3,000 to $10,000 each. Then the applications began arriving, and Commissioner Jeff Lunde says an overwhelming number were fraudulent.
What the reviewers found
NextStage, the nonprofit reviewing applications for the county, spotted forms that looked obviously fabricated with AI. Others had been copied and pasted across several businesses. When staff went out on site visits, many of the businesses turned out not to exist.
“Then at a certain point we’re like, ‘OK, we’re getting declining results on that.’ And so we said it’s time to stop the program. So we just stopped processing at that point,” Lunde said.
MPR News put the share of flagged applications higher still. It reported that the county had marked more than 200 of them for potential fraud, close to two-thirds of the total, and spoke to Lunde about what the shutdown means for legitimate businesses still waiting.
So far the county has paid out $500,000, all of it to businesses it could confirm were eligible.
“No fear out there”
Lunde’s frustration was with the lack of consequences. “The fact that people, after all this fraud, felt that they could apply and get away with it, I think it’s a problem because clearly there’s no fear out there,” he said.
He was blunt about what comes next. “Until we get it where people fear things, then they’re gonna keep doing it.”
Sources
- Hennepin County shuts down Metro Surge small business recovery fund because of fraud
- Hennepin County ends Operation Metro Surge business relief fund amid fraud concerns | MPR News
