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MINNEAPOLIMEDIA NEWS | Hennepin County Blocked Fraudulent Applications to Operation Metro Surge Business-Relief Fund
MINNEAPOLIS, MN (September 16, 2026). Fraudulent applications targeted a $2 million Hennepin County program created to help small businesses harmed by Operation Metro Surge, but county officials say none of the money was lost to fraud.
The program received approximately 300 applications after county commissioners approved the Small Business Recovery Fund in March. The county ultimately distributed about $500,000 among 82 qualifying applicants, considerably less than the amount originally authorized.
County officials have not disclosed precisely how many applications were determined to be fraudulent or otherwise illegitimate.
The county hired NextStage, a Minneapolis-based nonprofit organization, to administer the program. Applicants were required to document business expenses and income losses connected to the federal immigration-enforcement operation.
During the review, staff members reportedly discovered repeated language across different applications. Additional research and in-person site visits uncovered businesses that did not exist, applications submitted in the names of legitimate businesses without their owners’ knowledge and expense claims that appeared to have been inflated.
Hennepin County Commissioner Jeffrey Lunde said many of the questionable applications appeared to have been generated with artificial-intelligence tools.
The use of similar or AI-generated language does not independently prove fraud. County reviewers combined those warning signs with business-record checks, financial documentation and site visits before determining whether applications qualified for assistance.
A county spokesperson said the program’s controls prevented public money from being paid to fraudulent applicants. The prevention effort was successful but required extensive staff time and increased the program’s administrative costs.
The Hennepin County Sheriff’s Office has requested the application materials and has begun reviewing the matter for a possible criminal investigation. No charges have been announced, and the identities of the people suspected of submitting fraudulent applications have not been publicly released.
The attempted fraud did not eliminate the program’s underlying need. Many immigrant-owned and neighborhood businesses suffered severe revenue losses during Operation Metro Surge as residents stayed home, workers were detained and customers avoided commercial districts where federal agents were operating.
One legitimate recipient, Luro Boots in Bloomington, reported that sales fell by approximately 90 percent at the height of the operation. The business received a $10,000 grant that helped cover rent and operating expenses.
The findings present two simultaneous realities. Hennepin County successfully protected the relief fund from known fraudulent claims, but the volume and sophistication of the applications demonstrate how quickly emergency programs can become targets.
They also show the cost of effective oversight. Document verification, direct contact with business owners and physical site inspections helped protect the fund, but those safeguards required time and money that reduced the speed and efficiency of distributing urgently needed assistance.
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