On August 5, President Biden signed two payments into legislation that stretch to 10 years the statute of limitations for civil and legal enforcement actions for fraud on the Paycheck Safety Program (“PPP”) and Financial Damage Catastrophe Loans (“EIDL”). These two payments—the PPP and Financial institution Fraud Enforcement Harmonization Act of 2022 and the COVID-19 EIDL Fraud Statute of Limitations Act of 2022—had been each handed by Congress with bipartisan assist.
The brand new legal guidelines present that the federal government shall be prosecuting COVID-19 reduction fraud for the foreseeable future. The federal government has already introduced dozens of civil and legal enforcement actions for PPP and EIDL fraud, with extra enforcement actions being introduced each week. The federal government’s inner assessment of PPP and EIDL loans have already flagged tens of 1000’s of doubtless fraudulent loans totaling a number of billion {dollars}, giving the federal government loads of alternatives to proceed enforcement by way of the remainder of the ten-year limitations interval. The ten-year limitations interval additionally provides the federal government further time to analyze bigger fraud schemes, and to think about investigations into lenders on theories that they might have facilitated fraudulent loans by way of lax software assessment procedures. If firms and people who utilized for and obtained government-sponsored pandemic reduction funding haven’t performed due diligence to make sure these funds had been correctly obtained, used, and probably forgiven, now could be the time to do it.
