President Biden on Friday signed into law two bills aimed to boost the Justice Department’s abilities to investigate and prosecute fraud cases in connection with the distribution of small-business relief funds during the COVID-19 pandemic.
Laws Give Prosecutors More Time to Charge PPP Fraud
The two bills H.R. 7334 and H.R. 7352 were previously passed by the House of Congress that would establish a ten-year statute of limitations for prosecutions related to fraud related to the Paycheck Protection Program (PPP) and COVID-19 Economic Injury Disaster Loan (EIDL).
“The American people deserve to know that their tax dollars are being spent as intended. 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”, said President Biden.
The Paycheck Protection Program provided by the Federal government offered support to small businesses for them to pay their employees after companies were forced to shut down during the pandemic, while the EIDL loans and grants gave small businesses money to be used for working capital and other normal operating expenses.
The Bills were passed by Congress with strong bipartisan support and will help to extend the statute of limitations for fraud cases involving government-backed loans. These are part of a series of measures being made by the Biden administration to bolster the ability of prosecutors to bring charges in connection with Paycheck Protection Program and COVID-19 Economic Injury Disaster Loan (EIDL).
In March the administration appointed a special prosecutor on PPP Fraud. The new laws will further add to the legislative measures available to prosecutors to go after fraudsters at the state and federal levels.
The signing into law of these two bills was lauded by the Small Business Administration (SBA). “I want to thank the bipartisan leadership in the House and Senate, including House Small Business Committee Chairwoman Nydia Velazquez and Ranking Member Blaine Luetkemeyer, for getting this legislation passed, and I am so pleased to stand with President Biden as he signs it into law Today”, said Isabella Casillas Guzman, head of the SBA.
Billions Stolen in Fraudulent Loans
In May 2022, SBA’s Office of Inspector General (OIG) published a report had stated that the COVID EIDL program’s susceptibility to fraud had been a top challenge. The report had identified $78.1 billion in potentially fraudulent loans and grants to ineligible entities, as well as $6.7 billion in loans and grants related to identity theft allegations. This is in addition to the identified more than 70,000 loans totaling over $4.6 billion in potentially fraudulent PPP loans.
“Despite our great progress, we know some of the loans approved under the previous Administration were not legitimate. I have personally worked closely with Inspector General Hannibal Ware and our dedicated teams to ensure transparency and track down the people who abused these relief programs so they can be held accountable. This legislation extends the runway for those investigations and the prosecutions they support”, said Isabella Casillas Guzman.
This article, “President Biden Signs Laws Aimed at Cracking Down on EIDL and PPP Loan Fraud” was first published on Small Business Trends