WASHINGTON, D.C. — Today, October 21, 2022, U.S. Congressmen Josh Gottheimer (NJ-5) and Van Taylor (TX-3) are urging the U.S. Department of Justice (DOJ) and the U.S. Small Business Administration (SBA) to redouble efforts to identify and investigate cases of EIDL and PPP fraud, and to prosecute violators to the fullest extent of the law.
The Members also asked DOJ and SBA to provide Congress with recommendations for further legislative action to hold these fraudsters accountable.
Congress enacted bipartisan legislation in 2020 to direct SBA to provide Economic Injury Disaster Loans (EIDL) and Paycheck Protection Program Loans (PPP) to small businesses struggling with the economic impacts of the pandemic and to help keep Americans employed. As of April 2022, SBA had approved more than 3.9 million EIDL applications and more than 11.4 million PPP loans — helping hundreds of thousands of small businesses and saving millions of jobs.
Now, DOJ has prosecuted more than 1,000 cases of EIDL and PPP fraud, which resulted in millions of dollars of stolen COVID-19 small business relief. Hundreds more are under investigation.
“Hundreds of honest small business owners in our districts were denied loans through PPP and EIDL while criminals forged applications to steal taxpayer dollars. Your departments must continue working aggressively to identify and prosecute cases of EIDL and PPP fraud,” the Members wrote in a letter this week to Attorney General Merrick B. Garland and SBA Administrator Isabella Casillas Guzman. “Applicants from businesses in our districts may have been denied critical financial resources due to fraud, and we owe it to our constituents to hold bad actors accountable.”
The Members continued, “It is unthinkable that individuals knowingly stole resources from these programs that should have gone to support businesses in their community. These fraudsters need to be held accountable. As the Department of Justice continues to investigate cases of EIDL/PPP fraud, we request that you prosecute these violators to the fullest extent of the law.”
Congress passed bipartisan legislation to extend the statute of limitations for EIDL and PPP fraud cases from five years to ten years, to provide the federal government with additional time to investigate and prosecute cases of EIDL and PPP fraud and to ensure we bring fraudsters to justice.
In March, a Michigan man was convicted of stealing more than $4.1 million in EIDL and PPP loans after submitting twenty-nine different fraudulent applications on behalf of sixteen businesses. Another man was convicted in August of stealing $6 million in PPP loans.
Full text of the letter can be found here and below:
The Honorable Merrick B. Garland
Attorney General
U.S. Department of Justice
950 Pennsylvania Avenue, N.W.
Washington, D.C. 20530
The Honorable Isabella Casillas Guzman
Administrator
U.S. Small Business Administration
409 3rd Street, N.W.
Washington, D.C. 20416
Dear Attorney General Garland and Administrator Guzman:
We are deeply disturbed by the recent flurry of fraud convictions related to two COVID-19 relief programs administered by the Small Business Administration (SBA). The Economic Injury Disaster Loan (EIDL) and the Paycheck Protection Program (PPP) were delivered by Congress after the onset of the COVID-19 pandemic to provide critical assistance to small businesses struggling with business disruptions. These programs saved millions of jobs and supported the American economy throughout the pandemic. It is unthinkable that individuals knowingly stole resources from these programs that should have gone to support businesses in their community. These fraudsters need to be held accountable. As the Department of Justice continues to investigate cases of EIDL/PPP fraud, we request that you prosecute these violators to the fullest extent of the law.
In March, a Michigan man was convicted of stealing more than $4.1 million in EIDL and PPP loans after submitting twenty-nine different fraudulent applications on behalf of sixteen businesses.[1] Another man was convicted in August of stealing $6 million in PPP loans.[2] As you know, DOJ has already prosecuted more than 1000 cases of EIDL and PPP fraud, and it is likely there will be more instances of fraud uncovered as your agencies continue their investigation.
Hundreds of honest small business owners in our districts were denied loans through PPP and EIDL while criminals forged applications to steal taxpayer dollars. Your departments must continue working aggressively to identify and prosecute cases of EIDL and PPP fraud. Applicants from businesses in our districts may have been denied critical financial resources due to fraud, and we owe it to our constituents to hold bad actors accountable. That is why Congress passed bipartisan legislation to extend the statute of limitations for EIDL and PPP fraud cases from five years to ten years. This legislation provides your agencies with additional time to investigate and prosecute cases of EIDL and PPP fraud, to ensure we bring these fraudsters to justice.
Our offices stand ready to support your efforts to identify and prosecute cases of EIDL and PPP fraud. We ask that you please update us on these efforts and provide us with recommendations for further legislative action to support them.
Sincerely,
Josh Gottheimer
Member of Congress
Van Taylor
Member of Congress
[1] https://www.justice.gov/opa/pr/man-convicted-41-million-covid-19-relief-fraud
[2] https://www.justice.gov/usao-ndms/pr/starkville-man-sentenced-78-months-ppp-fraud
Original source can be found here.
