Right-wing activists accuse Republican state Rep. Ron Kresha of pandemic loan fraud

A lawsuit filed by conservative activists has accused state Rep. Ron Kresha, R-Little Falls, of lying about the number of people he employed on applications for a pandemic-era forgivable loan program. 

The Paycheck Protection Program was established by Congress in March 2020 to prop up small businesses and help them pay employees during the COVID-19 pandemic. Kresha applied for PPP loans for the economic development business of which he is a co-founder and CFO, Golden Shovel Agency.

Kresha’s company received more than $300,000 in the form of two loans, both of which were forgiven by the federal government. On his two applications, Kresha said he had 17 and 20 employees, according to the lawsuit. But during a deposition for an unrelated lawsuit, Kresha said he had no employees — only independent contractors, the complaint alleges.

In a statement to the Reformer, Kresha called the allegations “politically motivated and false.”

The plaintiff in the case is Troy Scheffler, who ran as an America First Party candidate against Republican Rep. Josh Heintzeman for House District 6B last year; he is represented by renowned Republican poster, lawyer and conspiracy theorist Nathan Hansen. The lawsuit is a qui tam action under the False Claims Act, meaning Hansen and Scheffler are suing Kresha on behalf of the federal government.

Kresha said Scheffler “has a pattern of filing frivolous lawsuits and has proven to be an unreliable source of information. Anyone can file a lawsuit, and anyone can allege anything, even lies.” 

Scheffler has sued Costco for assault, false imprisonment and disability discrimination over the store asking him to show his receipt and wear a mask in 2020. He has a “lengthy lawsuit history,” including against his political opponents, per the Brainerd Dispatch. (He sued the Dispatch over that article.)

Action 4 Liberty, a far-right faction of the Republican party, has criticized Kresha for being a “RINO” — Republican In Name Only.

State Rep. Elliot Engen, R-White Bear Township, who is running for state auditor, posted a video Tuesday calling for the GOP-controlled House Fraud Prevention and State Agency Oversight Policy Committee to hold a hearing on the matter. 

“We need an independent watchdog who has integrity, who … doesn’t selectively choose when to call out bad behavior,” Engen said in the video. 

Kresha said he is “disappointed with Mr. Engen’s misinformed attack.”

“He and I haven’t spoken and I am surprised that a potential MN Auditor doesn’t understand the difference between false allegations and actual fact,” Kresha wrote to the Reformer.

Republican state Rep. Drew Roach of Farmington, Action 4 Liberty president and former state Rep. Erik Mortenson and Action 4 Liberty founder Jake Duesenberg quickly voiced support for Engen.

“If these accusations have merit, Rep. Ron Kresha must resign immediately!” Roach posted on X.