Iowa Senator Joni Ernst says SBA money flowed to ‘Quality Learing Center’ and other questionable companies, calls for fraud investigation

WASHINGTON — U.S. Sen. Joni Ernst says federal small-business money flowed to companies now under scrutiny, including Minnesota’s infamous “Quality Learing Center” and dozens of questionable personal-care companies in Ohio.

Ernst, an Iowa Republican who chairs the Senate Committee on Small Business and Entrepreneurship, said the Small Business Administration paid more than $231,000 to the Quality Learing Center, which she described as an abandoned operation exposed as a fraud front by YouTuber Nick Shirley.

According to Ernst’s office, financial records accessed through USAspending.gov show the Quality Learing Center received $221,000 through the Paycheck Protection Program and a $10,000 Economic Injury Disaster Loan from the SBA.

Ernst is now directing the SBA’s Office of Inspector General to investigate the payments for potential fraud and to recover any taxpayer money that may have been improperly obtained.

“Fraud is not a small business. In fact, it’s a big business with scammers stealing $1.4 billion taxpayer dollars every single day,” Ernst said. “Americans expect their tax dollars to be spent responsibly — not to bankroll criminal enterprises.”

The allegations come as federal watchdogs and lawmakers continue examining fraud tied to pandemic-era relief programs, including the Paycheck Protection Program, which was designed to help businesses keep workers employed during COVID-19 shutdowns and disruptions.

The program moved massive amounts of money quickly during the pandemic, but it also became a major target for fraudsters, shell companies and questionable operators who allegedly used federal aid programs as a taxpayer-funded payday.

Ernst’s office said the concerns are not limited to Minnesota.

According to the senator, 28 personal-care billing companies in Ohio that were recently highlighted by The Daily Wire were located in largely abandoned buildings. Collectively, those companies, their owners and other businesses tied to their owners allegedly received nearly $3 million in SBA 7(a) loans, about $2.5 million in PPP payments and almost $600,000 in EIDL awards.

Ernst said those companies also should be investigated.

“While bureaucrats keep turning a blind eye to the rampant fraud, I’m putting investigators to work so we can recover every stolen penny and hold scammers accountable,” Ernst said. “Con artists across the country, and especially those at the Quality Learing Center, are soon going to lear the hard way that fraud no longer pays.”

The Quality Learing Center has become a symbol for critics of government fraud after Shirley’s reporting drew attention to the operation. Ernst’s office said the business is now abandoned, raising questions about how federal aid was approved and whether basic verification safeguards failed.

The new push also follows broader scrutiny of fraud in Minnesota, where Ernst’s office said an estimated $9 billion or more has been exposed in fraud.

Ernst has been calling for tougher anti-fraud measures and longer windows to prosecute pandemic-relief cases. Her office pointed to the SBA Fraud Enforcement Extension Act, which extended the time available to pursue COVID-relief fraudsters and recover taxpayer money.

She has also backed the Putting an N to Learing about Fraud Act, aimed at stopping scams earlier and clawing back money taken from taxpayers. Last month, Ernst unveiled a larger anti-fraud package called the Protecting American Taxpayers Act, which she says would help recover stolen funds, protect public money and stop fraud before it spreads.

The issue is both political and investigative for Ernst, who has made government waste, fraud and abuse a major part of her work in Washington.

Her latest request asks the SBA’s inspector general to review whether federal dollars went to fraudulent or improper businesses, whether agency safeguards failed, and whether taxpayers can get any of the money back.

The SBA payments described by Ernst have not, by themselves, resulted in publicly announced criminal charges against every company or person named in her release. The senator is calling for investigators to determine whether fraud occurred and whether recovery action is warranted.

(TOP PHOTO via U.S. Sen. Joni Ernst’s office.)