Hennepin County set up a $2 million fund to blunt the economic sting of a federal immigration enforcement operation it opposed. Fraudsters moved in almost immediately. More than 200 of 300 applications were flagged as potentially fake, and the program is now dead.
Commissioners approved the Small Business Recovery Fund in March. Grants ranged from $3,000 to $10,000 for businesses claiming at least a 30 percent revenue loss. About 80 of those 300 applicants made it through the review. The county distributed roughly $500,000 before pulling the plug.
Hennepin County Commissioner Jeffrey Lunde told CBS Minnesota that officials were finding more suspicious applications as the review went on.
“You know what? We’re getting diminishing results. We were finding more and more fraud.”
County officials said some applications included false information. They also found what appeared to be AI-written language repeated across multiple filings, sometimes with little changed beyond the business name and phone number. When county staff checked listed addresses, some of the businesses were not there. The county stopped processing applications after that.
The county says no fraudulent applications received money. Officials credited additional scrutiny, in-person inspections and other checks before grants were approved.
“We need to prosecute some people. People need to be held accountable.”
The Hennepin County Sheriff’s Office was asked in June to review the applications for possible criminal activity. Investigators requested the records in July. The office says it will open an investigation once it receives them.
Operation Metro Surge began Dec. 1, 2025. At its peak, roughly 3,000 federal officers were operating in Minnesota. Local officials blamed the enforcement operation for lost sales and disruptions to businesses.
Some of the early estimates did not hold up as well once sales-tax numbers came in. FOX 9 found sales across several major industries in Minnesota’s two largest counties were down roughly $55 million during the period it examined.
Minnesota had already been through Feeding Our Future, the roughly $250 million fraud case involving a federal child-nutrition program during COVID and a web of fake nonprofits and sham businesses. Hennepin County then opened this fund and wound up flagging more than 200 of 300 applications. This time, staff caught most of it before the money went out.
CBS Minnesota reported that $1 million from the Hennepin County program will remain available for small-business financing. Another $500,000 is set aside for consulting and promotional assistance.
The grant applications stopped. The sheriff’s investigation has not started. And the next program is already being planned.
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