Two new laws give the feds more time to ferret out Paycheck Protection Program (PPP) and COVID-19 Economic Injury Disaster Loan (EIDL) fraud. H.R. 7352 and H.R. 7334 extend the statute of limitations for fraud charges involving PPP and EIDL fraud to 10 years, up from the previous five, note attorneys Kurt R. Erskine, Adrienne Frazior, and Ellen Persons with law firm Polsinelli in online analysis. “Some estimates put the amount of PPP and EIDL fraud at 10 percent of the total funds disbursed,” Erskine, Frazior, and Persons say. The Department of Justice has charged over 1,000 individuals for PPP/EIDL fraud and is investigating 1,800 more, the attorneys add.
Do this: “Companies and individuals who received the relief funds should … be proactive and conduct due diligence now, checking to see that the loans were properly received, and the funds were appropriately used,” Erskine, Frazior, and Persons advise. And going forward, borrowers “should be prepared for increased scrutiny and should maintain all loan documentation for at least 10 years from the date the loan was received, used or forgiven, whichever is later,” they say.