Biden signs bills aimed at catching up on pandemic business loan fraud

President Joe Biden signed a pair of bills Friday that would give the Department of Justice more time to investigate and prosecute people accused of fraudulently collecting government payments with the goal of helping small businesses during the COVID-19 pandemic.


What you need to know

  • President Joe Biden signed a pair of bills Friday that would give the Department of Justice more time to investigate and prosecute people accused of fraudulently collecting government payments with the goal of helping small businesses during the COVID-19 pandemic.
  • The bills, recently passed by Congress with broad bipartisan support, establish 10-year statute of limitations for criminal charges and civil enforcement.
  • In October 2020, the 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’s watchdog identified more than 70,000 PPP loans totaling more than $4.6 billion that were potentially fraudulent.

The PPP (Payroll Protection Program), Bank Fraud Enforcement Act, and COVID-19 EIDL (Economic Damage Disaster Loan) define a 10-year statute of limitations for fraud for criminal charges and civil enforcement. Both bills were recently passed by Congress with broad bipartisan support.

“The American people deserve to know that their tax money is being spent as intended,” Biden said. “My message to those cheaters out there is: You can’t hide. We will find you. We will make you pay for what you stole and hold you accountable by law.”

The Paycheck Protection Program has helped small businesses pay their employees after businesses were forced to close during the pandemic. EIDL loans and grants for small businesses gave money to use for working capital and other normal operating expenses.

In October 2020, the 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’s watchdog identified more than 70,000 PPP loans totaling more than $4.6 billion that were potentially fraudulent.

The inspector general blamed pressure to make payments quickly to the Small Business Administration’s lowering of protective barriers to prevent fraud.

In his State of the Union address in March, Biden announced the appointment of a special attorney general for the Department of Justice for the COVID-19 pandemic relief to prosecute related fraud cases.

Biden said the bills would help restore Americans’ confidence in the government. The president also blamed the Trump administration for allowing such fraud.

Biden, who is still testing positive for COVID-19, said from the balcony of the White House Blue Room. We know with that last administration, that’s not what happened. Much of the Small Business Relief funding, approved by Congress, ended up in the hands of those who didn’t need it or the criminal gangs who stole the money outright.

“Not only has the Trump administration allowed the biggest corporations teams of lawyers and accountants to skip to the front of the line, my predecessor has undermined the oversight bodies that were supposed to be on the job to make sure the relief that goes to mom and pop companies was supposed to get in the first place.”

Trump’s office did not immediately respond to Friday’s request for comment.

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