President Biden signed two bills into law on Friday aimed at increasing the Department of Justice’s abilities to investigate and prosecute fraud related to the distribution of relief funds to small businesses during the COVID-19 pandemic .
The laws give prosecutors more time to charge PPP fraud
Both bills HR 7334 and HR 7352 were previously approved by the House of Congress which would establish a ten-year statute of limitations for prosecutions related to fraud related to the Paycheck Protection Program (PPP) and the economic damage disaster loan (EIDL) COVID-19. ).
“The American people deserve to know that their tax dollars are being spent as intended. My message to these cheaters is this: You can’t hide. We will find you. We will make you pay for what you did steal and we will hold you accountable under the law,” President Biden said.
The federal government’s Paycheck Protection Program supported small businesses in paying their employees after businesses were forced to close during the pandemic, while EIDL loans and grants gave money to small businesses to use as working capital and other normal activities. operating expenses
The bills passed Congress with strong bipartisan support and will help extend the statute of limitations for fraud cases involving government-backed loans. These are part of a series of steps the Biden administration is taking to strengthen the ability of prosecutors to bring charges related to the Paycheck Protection Program and the Economic Injury Disaster Loan (EIDL) COVID- 19.
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 pursue fraudsters at the state and federal level.
The signing of these two bills was praised by the Small Business Administration (SBA). “I want to thank the bipartisan leadership in the House and Senate, including House Small Business Committee Chair Nydia Velazquez and Ranking Member Blaine Luetkemeyer, for passing this legislation, and I am very pleased to be on next to President Biden as he signs it. Today,” said Isabella Casillas Guzmán, head of the SBA.
Billions stolen in fraudulent loans
In May 2022, the SBA’s Office of Inspector General (OIG) released a report that said the susceptibility to fraud of the COVID EIDL program had been a primary 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 linked to allegations of identity theft. This is in addition to the more than 70,000 loans identified totaling more than $4.6 billion in potentially fraudulent PPP loans.
“Despite our great progress, we know that some of the loans approved by 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 those who abused these relief programs so they can be held accountable. This legislation expands the track of those investigations and the processes they support”, said Isabella Casillas Guzmán.
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