PPP Loan Statute of Limitations

There has been a noticeable spike in the number of PPP Loan Fraud criminal cases being charged by the federal government in Denver, Colorado and across the country. This explosion in wire fraud and bank fraud charges is a direct result of the U.S. Department of Justice’s creation of COVID-19 Fraud “Strike Force” right here the District of Colorado. PPP loan statute of limitations issues are coming up more and more as we pass the 5-year mark from the beginning of the global pandemic.

Read more about, the increase in federal charges related to PPP and EIDL loans, and how the lawyers at Evergreen Attorneys can help fight your case.

What Makes Evergreen Attorneys Different?

There are dozens if not hundreds of lawyers you can find on the internet who claim to be experienced federal criminal defense lawyers. Almost all of these Denver gun rights lawyers claim to be “experts” or “fighters” who will give you “aggressive representation” or something similar.

Here are some of the things that we think makes Evergreen Attorneys different from the pack:

• We only focus on federal cases and high-stakes felonies. No family law clients, no medical malpractice, no transactional lawyers, no traffic tickets.
• We only employ experienced partner-level attorneys. No fresh-faced associates right out of law school.
• We are a boutique white collar law firm. Every decision is tailored towards providing client-first exceptional criminal defense.
• Evergreen Attorneys handles criminal cases nationwide. We are not interested in being golfing buddies with the prosecutor.

What is PPP Loan Fraud?

By way of background, Congress passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) during the early part of the COVID pandemic. The year was 2020 and no one new if the economy was going to completely crater.

A small part of the larger  CARES Act created the Paycheck Protection Program (PPP) and expanded the Economic Injury Disaster Loans (EIDL) to help small business during a global emergency.

Since the CARES Act went into effect over 11.5 million PPP loans were approved totaling approximately $792.6 billion. That’s an incredible amount of money in a short amount of time.

Congress was very short on the nuances of what was required to apply for a PPP loan. The applications were being revised on the fly. And non-banks were allowed to offer PPP loans as originators. In some ways, it was the wild, wild, west of finance. We have previously written generally about COVID-19 PPP fraud here:

• https://evergreenattorneys.com/white-collar-crime/colorado-ppp-loan-fraud/
• https://evergreenattorneys.com/white-collar-crime/orlando-white-color-crime-lawyer-ppp-loan-fraud/

As a result of this “spigot” of federal money, there were many illegitimate distributions made. Some of these were real businesses who inflated their supporting numbers. Some of these were real businesses who improperly used the money that they received.

Unfortunately, many of these illegitimate distributions were also made to fake companies that either existed or did not conduct any real business. Whatever the Government is arguing in your case, the Evergreen Attorneys team is prepared to fight to bring your truth to light.

 

What are the Default PPP Loan Statute of Limitations?

First off, a bit of nomenclature is important to work through. There is no specific PPP/EIDL Loan Fraud crime in the federal codes. You cannot open a law book and find the words “PPP Loan Fraud” or anything like that.

Instead, PPP Loan Fraud is prosecuting using existing tools in the federal criminal toolbox. That means that prosecutors charge people with things like federal bank fraud, federal wire fraud, and federal money laundering when they think that PPP or EIDL loans were improperly obtained or used.

Federal Bank Fraud Statute of Limitations

Second, each federal crime carries its own substantive statute of limitations. So, for example, federal bank fraud is prosecuted as a violation of 18 U.S.C. Section 1344. You can find the elements of federal bank fraud at section 1344. The federal statute of limitations for a bank fraud violation of section 1344 is ten years:

Financial Institution Offenses

No person shall be prosecuted, tried, or punished for a violation of, or a conspiracy to violate—

(1)section 215, 656, 657, 1005, 1006, 1007, 1014, 1033, or 1344;

(2)section 1341 or 1343, if the offense affects a financial institution; or

(3)section 1963, to the extent that the racketeering activity involves a violation of section 1344;

unless the indictment is returned or the information is filed within 10 years after the commission of the offense.

18 U.S.C. Section 3293.

Federal Money Laundering and Wire Fraud Statute of Limitations

Money laundering is another commonly charged crime in PPP/EIDL loan fraud cases. Money laundering is charged under either 18 U.S.C. Section 1956 or 18 U.S.C. Section 1957. Generally speaking, the statute of limitations for federal money laundering crimes is 5 years after the date of the commission of the offense. See 18 U.S.C. Section 3282; https://www.justice.gov/archives/jm/criminal-resource-manual-650-length-limitations-period.

However, there is a longer 10-year statute of limitations for crimes that are shown to impact a certain financial institutions such as banks. Note that this longer period only applies to crimes related generally to federally insured banks.

This last caveat is very important for PPP/EIDL cases.

Informed readers will recall that under the federal CARES Act (the law which authorized PPP/EIDL loans), institutions that were not traditional banks were allowed to vet, market, and issue billions of dollars of PPP/EIDL loans.

This meant that non-bank entities were responsible for the vast majority of PPP/EIDL loans that were disbursed. They were often far less diligent in the paperwork required to submit and obtain PPP/EIDL loans than a traditional banking entity would have been.

These non-bank entities also engaged in widespread aggressive sales tactics that were designed to have consumers submit as many loan applications as possible.

But the real rub for today is that the statute of limitations for any PPP/EIDL loan fraud case related to these non-banks would be 5-years since there were no banks involved.

How long are the PPP/EIDL Statute of Limitations Now?

Shortly after the PPP/EIDL programs began, it became clear that there were lots of instances of people misbehaving. In response, the Pandemic Response Accountability Committee (PRAC) was created. You can learn more about that working group here: https://pandemicoversight.gov

In 2022, Congress recognized that this mis-match among the criminal law tools was a problem. House Resolution 7352, known as the PPP and Bank Fraud Enforcement Harmonization Act of 2022, amended the Small Business Act to extended the statute of limitations for fraud by borrowers under the PPP program.

A separate bill, known as the COVID-19 EIDL Fraud Statute of Limitations Act of 2022 (H.R. 7334), extended the statute of limitations for EIDL loans as well.

The net result is that the statute of limitations for wired fraud from either program is now generally 10 years instead of 5. That means that the government can file charges up to 10 years after the date that a person applied for or obtained a loan fraudulently.

Again, this is a change from prior law. Because many of the PPP/EIDL loans were issued by non-bank fintechs, crimes related to those loans could only be charged as wire fraud which had a 5-year default SOL. Now the period is 10-years for prosecution regardless of the type of institution which issued the loan.

PPP Loan Fraud in Colorado

As mentioned above, the United States Department of Justice established a COVID-19 Strike Force in the District of Colorado intended to specifically target and charge individuals accused on PPP loan fraud. According to the DOJ, as of August 2023:

The Justice Department has [ ] seized over $1.4 billion in COVID relief funds . . . and charged over 3,000 defendants with crimes in federal districts across the country.

Many of these cases are being prosecuted in the District of Colorado, even if the defendant did not reside or have their business in Colorado. That is because many SBA loans were funded through banks in Colorado which, in the federal justice system, is enough to give the District Court of Colorado jurisdiction.

Denver Federal Criminal Defense Attorneys

If you have received a target letter or are subject to a CID, it is crucial to have knowledgeable and experienced lawyers get involved ASAP. Sometimes these can be resolved without charges being brought by the federal government.

If you have already been indicted on federal PPP loan fraud or other wire fraud charges in Colorado, you need federal criminal defense lawyers that know the federal system and know how to defend white collar crimes.

Colorado PPP Fraud Defense Lawyers at Evergreen Attorneys

Contact the PPP Lawyers at Evergreen Attorneys

The lawyers at Evergreen Attorneys have experience defending white collar federal charges and allegations of PPP loan fraud. Contact us today for a free consultation by calling (303) 948-1489 or by email at [email protected].