In March of 2022, after President Biden’s State of the Union Address, we summarized increased efforts specifically related to the Paycheck Protection Program (“PPP”) and other pandemic relief fraud. Now a year later, President Biden has doubled down on the government’s efforts to fight pandemic-relief fraud.

President Biden’s Proposal to Greatly Expand Resources

President Biden has announced a Pandemic Anti-Fraud proposal to invest an additional $1.6 Billion to ensure oversight and enforcement bodies have both the resources and the time to prosecute major pandemic-relief fraud and identity theft. For pandemic-relief fraud investigations, the President’s proposal looks to:

  • Invest $300 million to triple the COVID-19 strike force teams created by the Department of Justice (DOJ) after the President’s 2022 State of the Union address, adding at least seven strike forces to the three established in 2022. These strike force teams combine investigative, prosecutorial, and analytical capacities and will ensure that the government has the necessary resources to prosecute a broad range of pandemic-relief fraud. The strike forces are investigating fraud in Economic Impact Disaster Loans (EIDL), Paycheck Protection Program Loans (PPP), the Restaurant Revitalization Fund (RRF), the Employee Retention Credit Program (ERC), the Shuttered Venue Operator Grants (SVOG) and Provider Relief Funds.
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  • Provide at least $300 million to the Pandemic Inspectors General and Pandemic Response Accountability Committee (PRAC) to support the hiring of long-term investigative staff. The Small Business Administration (SBA) and Department of Labor (DOL) each would get at least $100 million to hire investigators to pursue special cases of organized pandemic fraud and support the strike forces. This proposal would also provide funding for PRAC to hire or provide reimbursements for investigators to support major prosecutions and ensure that other pandemic Inspectors Generals have the resources they need.
  • Increase the statute of limitations to 10 years for systematic pandemic-related fraud, including unemployment insurance programs. The statute of limitations was extended for PPP and COVID-19 Economic Injury Disaster Loans in 2022, the proposal seeks to extend the statute for other pandemic-related frauds to ensure that the DOJ and DOL’s Inspector General have the time and multi-year resources to investigate and prosecute systemic or multi-state fraud.
  • Ensure easy access to multi-state data to detect multi-state fraud. This would allow the investigators to access state-specific data to easily detect instances of multi-state fraud where the same identifying information is used to apply for unemployment benefits across multiple states.

Problems With Your PPP, EIDL, ERC, RRF or Other Pandemic Relief Application – Here’s Why You Should Act Now

To investigate pandemic-relief fraud, the government can simply match your filings with documents already in its databases, including payroll tax filings, unemployment forms, and corporate tax returns. If these forms do not match up, or there are other issues, an investigation can be launched. In addition, the government has invested heavily in sophisticated data analytics to investigate your filings. With a ten-year statute of limitations and the vast increase in manpower, the government has ample time and resources to find and prosecute you.

Therefore, if you have received PPP, EIDL, ERC, or any other form of pandemic relief, you should consider consulting counsel to address any potential problems with your applications or usage of pandemic funds before a government investigation is initiated. Additionally, if you have received a request for information, it is important to understand the risks of a government investigation and the steps you need to take to protect your business.

At Withum, we have assisted in the preparation of thousands of pandemic-relief applications and have forensic experts with specialized pandemic-relief expertise who have assisted counsel in correcting applications and testified as expert witnesses in defense of pandemic fraud.

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For more information on this topic, please contact a member of Withum’s Forensics, Investigations and White-Collar Criminal Defense Team.