Promissory Notes – Banking & Finance Insights, Volume 2, Issue 8 | Spilman Thomas & Battle, PLLC

Biden Signs Bills Aimed at Catching Pandemic Business Loan Cheats –

“President Joe Biden signed a pair of bills 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.”

Why this is important: In recent issues of Promissory Notes, we have been tracking developments in the prosecution of alleged fraud in the various economic relief programs that emerged during the COVID-19 pandemic. The Paycheck Protection Program (“PPP”) and the Economic Injury Disaster Loan (“EIDL”) were two of the main programs targeted by fraudsters, with an estimated $80 billion in fraudulent loans and grants between the two programs. This month, the President signed the PPP and Bank Fraud Enforcement Act and the COVID-19 EIDL Fraud Statute of Limitations Act with bipartisan support. At their core, the two laws extend the statute of limitations for criminal charges and civil enforcement in prosecuting fraud to 10 years. Without these two laws, the statute of limitations would have expired after only six years. Both lenders and borrowers should take steps to protect themselves and their customers from any pandemic related fraud. In addition to conducting their own internal analysis of any PPP or EIDL loans, company document retention practices should be adjusted as well. Lenders and borrowers should hold and maintain all records related to these programs for a minimum of 10 years from when the loan application was received, processed or forgiven. In addition, the lessons learned through this process should be applied to future relief programs to help prevent fraud on the front end as well.

Please see full Newsletter below for more information.

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