President Biden signs bill targeting PPP loan fraud Create History Clothing

President Biden signs bill targeting PPP loan fraud

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

The bills, which recently passed Congress with vast bipartisan support, establish 10-year statutes 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

And last year, the agency watchdog identified more than 70,000 PPP loans totaling over $4.6 billion that were potentially fraudulent


The PPP (Paycheck Protection Program) and Bank Fraud Enforcement Act and the COVID-19 EIDL (Economic Injury Disaster Loan) Fraud Statute of Limitations Act establish 10-year statutes of limitations for criminal charges and civil enforcement. Both bills recently passed Congress with vast bipartisan support.

“American people deserve to know that their tax dollars are being spent as intended,” Biden said. “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.”

The Paycheck Protection Program helped small businesses pay their employees after companies were forced to shut down during the pandemic. EIDL loans and grants gave small businesses money to be used for working capital and other normal operation 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. And last year, the agency watchdog identified more than 70,000 PPP loans totaling over $4.6 billion that were potentially fraudulent.

The inspector general blamed pressure to make payments quickly for the Small Business Administration lowering its guardrails to prevent fraud.

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

Biden said the bills will help retore Americans’ faith in government. The president also blamed the Trump administration for allowing such fraud.

“Part of our plan is making sure that when we commit funds to help American small business, it actually goes to those small businesses they're supposed to go to,” Biden, who is still testing positive for COVID-19, said from the White House’s Blue Room balcony. “We know with that last administration, that's not what happened. Too much of small business relief funding, which was passed by the Congress, ended up in the hands of those who either didn't need it or criminal syndicates who outright stole the money.

“Not only did the Trump administration let the biggest businesses with the teams of lawyers and accountants skip to the front of the line, my predecessor undermined the watchdogs who were supposed to be on the job to make sure relief went to mom-and-pop businesses were supposed to get it in the first place.”

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