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PPP and EIDL Loan Fraud

by | Sep 12, 2022 | Multi-state Tax Issues, Tax Crimes |

When it comes to PPP and EIDL fraud, the government has more time to make its case against defendants.

In August 2022, the statute of limitations to bring charges against a defendant for fraud under the Paycheck Protection Program (PPP) or Economic Injury Disaster Loan (EIDL), both of which are administered by the Small Business Administration (SBA), was increased from a five or six-year statute of limitations (depending on the crime charged), to a 10-year period of time for the government to charge the defendant.  The time was extended to give investigators and prosecutors more time to bring criminal and civil fraud charges primarily focused on loans obtained through financial technology (fintech) companies, rather than traditional banks.

It is estimated that there may be as many as $4.6 billion of potential fraudulent PPP loans that were funded. Analysts at the SBA Office of the Inspector General have determined that about 75% of alleged PPP fraud was committed through a fintech lender, even though those lenders only processed approximately 15% of PPP applications.

Borrowers who are concerned regarding their compliance with PPP or conduct related to other CARES Act programs should seek legal counsel. If you are seeking legal counsel, contact our office here.


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