Bills extend the statute of limitation for prosecuting PPP, and EIDL fraud

President Joe Biden signed two bills on Friday that give the federal
government more time to catch and prosecute fraud related to two of
the most popular COVID-19 small business relief programs — the
Paycheck Protection Program (PPP) and COVID-19 Economic Injury
Disaster Loans (EIDL).

The bills are:

H.R. 7352, the “PPP and Bank Fraud Enforcement Harmonization Act of
2022,” which extends to 10 years the statute of limitation for fraud
charges to be brought in connection with PPP loan applications. The
law applies to first- or second-draw loans made under the program.
H.R. 7334, the “COVID-19 EIDL Fraud Statute of Limitations Act of
2022,” gives prosecutors 10 years to file fraud charges connected to
loan applications from the COVID-19-related EIDL program, including
EIDL advances and Targeted EIDL advances.

The bills specify that any criminal charge or civil enforcement action
alleging that fraud was committed shall be filed not later than 10
years after the offense was committed.

“The American people deserve to know that their tax dollars are being
spent as intended,” Biden said via teleconference. “My message to
those cheats out there is this: You can’t hide. We’re going to find
you. We’re going to make you pay back what you stole and hold you
accountable under the law.”

The bills passed Congress with bipartisan support.

In October 2020, the U.S. Small Business Administration’s Office of
Inspector General identified $78.1 billion in potentially fraudulent
EIDL loans and grants paid to ineligible entities and another $6.7
billion in loans and grants linked to alleged identity theft.

Last year, the agency identified more than 70,000 PPP loans, totaling
more than $4.6 billion, that were potentially fraudulent.

In March, Biden announced the appointment of a Justice Department
special prosecutor for COVID-19 pandemic relief to prosecute related
fraud cases.

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