Hennepin Co. rejects Operation Metro Surge relief program applications after 'rigorous review'

MINNEAPOLIS (FOX 9) - A Hennepin County program meant to help small businesses during the Operation Metro Surge federal immigration enforcement ultimately approved less than half of its applications after officials flagged more than 200 for potential fraud.

Hennepin County small business relief program

What we know:

According to Hennepin County officials, the program received 300 applications seeking a portion of the $2 million commissioners approved for the program in March 2026.

However, officials ended up distributing only an estimated $500,000 to help cover two months of rent or commercial mortgage payments for eligible businesses, benefiting around 80 applicants.

A statement to FOX 9 from Hennepin County Chief Public Relations Officer Carolyn Marinan says that the county collaborated with a community-based lender to review the 300 small business recovery fund applications, ultimately approving only a fraction of them.

The county says that after a "rigorous review," the county has since ended the recovery fund program, the statement says.

"We’ve moved beyond the urgent need for immediate grant relief and are focusing our efforts on strategies that support the long-term vitality and sustainability of businesses," Marinan said in a statement.

The county says it did not experience any loss of funds due to fraud, as evaluation of applications required "extensive due diligence" to safeguard public funds.

What they're saying:

"Clearly, fraud and people who want to commit it are still very active, as they do not fear the penalty. Thanks to county staff and our partner, we were able [to] thwart these efforts by devoting more time and effort to tighter oversight, in-person inspections and increased scrutiny," Hennepin County Commissioner Jeffrey Lunde said in a statement to FOX 9. "As the fraudsters continue their efforts, we need to ramp up our game as well. This is the new normal for all levels of government in Minnesota."

The backstory:

Operation Metro Surge began on Dec. 1, 2025, and at its height, there were roughly 3,000 federal officers in Minnesota as part of the operation. 

During this time, small businesses and residents reported disruptions to daily life and losses in revenue and/or wages.

A City of Minneapolis report estimated losses by restaurants and small businesses could be up to $81 million within the city alone. Another report concluded an overall impact cost of up to $203 million.

However, it has since been argued the data could be inflated.

FOX 9 previously obtained sales tax data breaking down taxable sales comparisons across key industries statewide, including retail, hotel, and food service from December, January and February.

In December 2025, taxable sales were down by $17 million compared with the year before. 

In January 2026, sales for Minneapolis restaurants and bars were down $9 million year-over-year, and in February, sales were down $5 million.

In total, sales at food service and drinking places across the three months in Minneapolis were down by $31 million compared with the years prior. 

Retail taxable sales in St. Paul across December, January, and February were down roughly $10 million compared with the same months the year before.

Overall, the economic impact in the state’s two largest counties across the three key industries during this timeframe shows a roughly $55 million decrease in sales than the prior year.

Fraud in Minnesota and the race for governor

Big picture view:

How to address fraud in Minnesota’s social service systems has become a central political theme in the race for governor.

Both Democrat Amy Klobuchar and Republican Lisa Demuth have vowed to reign in efforts to bilk state services such as housing, daycare and nutrition programs in the wake of the Feeding our Future fraud scheme – which stole roughly $250 million from COVID-19 pandemic era funds from programs meant to feed children.