Fraud Friday – House Introduces Bills to Extend Statute of Limitation on PPP & EIDL Fraud

May 20, 2022

Delaney Sexton
Contributing Editor

Fraud Friday – House Introduces Bills to Extend Statute of Limitation on PPP & EIDL Fraud

“Fraudsters that obtained PPP and EIDL loans abused taxpayer funds and took money away from small businesses when they needed relief the most. Anyone that took advantage of a once-in-a-lifetime crisis to line their own pockets with fraudulent loans must be held accountable,” says Chairwoman Velázquez. “These bills will provide the Department of Justice and state and local law enforcement agencies with the time they need to investigate and prosecute these cases.”

Chairwoman Nydia Velásquez and Ranking Member Blaine Luetkemeyer of the House Small Business Committee introduced two bills that would extend the six-year statute of limitations for fraud prosecutions to 10 years for PPP (H.R. 7352) and EIDL (H.R. 7334) fraud, allowing the government to investigate any companies believed to have made false statements on applications.

The SBA intends to audit PPP applications and even forgiveness applications after forgiveness was already granted if the applications are suspected to be fraudulent. The EIDL bill would increase the statute of limitations on EIDL applications, EIDL Advance applications, and Targeted EIDL Advance applications to “10 years after the offense was committed”. If these two bills ultimately pass, PPP fraud can be investigated into 2031 while EIDL fraud can be investigated into 2032.

With the potential for PPP and EIDL fraud indictments and charges to go on for many years, contractors need to keep detailed, accurate, and well-organized records relating to all their loans.

The PPP and Bank Fraud Enforcement Harmonization Act of 2022 and COVID-19 EIDL Fraud Statute of Limitations Act of 2022 have both been placed on the Union Calendar as of May 17th. These bills will likely pass because of “public impression that fraud was rampant in the programs and the push to claw back funds where possible”.

“A core function of this committee is to provide ample oversight over the SBA’s management of emergency relief loan programs. The ongoing fraud and abuse of emergency relief funds by bad actors deserves the time and resources to accurately highlight,” says Ranking Member Luetkemeyer. “This bill does just that. Extending the statutes of limitations from five to ten years gives the time investigators need.”

House Press Release
Piliero Mazza Article
H.R. 7334
H.R. 7352