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President Biden signs laws targeting EIDL and PPP loan fraud

Written on Aug 12, 2022

President Biden has 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. 

The two bills H.R. 7334 and H.R. 7352 were previously passed by the House of Congress that would establish a 10-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 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. 

In May 2022, the 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.