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PPP and EIDL Loan Fraud: Charges and Time Limits

PPP and EIDL loans today

Paycheck Protection Program (PPP) loans were made by private lenders in 2020 and 2021, guaranteed by the U.S. Small Business Administration (SBA), and forgivable if spent on payroll and other permitted costs. COVID-19 Economic Injury Disaster Loans (EIDL) came from the SBA directly. On September 14, 2026, the SBA announced it had suspended about 870,000 borrowers tied to suspected PPP and EIDL fraud from future SBA loans and programs. It said it would send final demand letters to borrowers it suspects of fraud, giving them 30 days to repay in full, starting with about 8,000 borrowers in Kansas and Missouri. A suspension rests on suspected fraud, not a court finding.

Time limits

Most federal crimes must be charged within five years. Bank fraud, false statements to a bank, and wire fraud affecting a financial institution already had ten years under an earlier federal law. In August 2022 Congress set a ten-year limit for criminal and civil fraud cases against PPP and EIDL borrowers. The laws do not say whether they apply to conduct before they passed, which includes every PPP and EIDL loan application. They did pass before any five-year period had run, and courts have generally allowed a time limit that has not yet run to be extended, though not one that has already expired to be revived.

Charges and civil claims

Federal charges in these cases can include bank fraud and false statements to a federally insured bank, each carrying up to 30 years. Wire fraud carries up to 20 years, or 30 if it affects a financial institution or involves benefits tied to a presidentially declared major disaster or emergency. A false statement in a federal matter, including to a federal agent, carries up to 5 years. These are maximums, not predictions. Sentencing starts with the advisory federal Guidelines, where loss amount weighs heavily.

Under the civil False Claims Act, a person found liable generally owes three times the government's damages plus a penalty for each false claim. Private whistleblowers can bring these suits for the government.

Intent and good faith

For wire fraud, and for bank fraud charged as a scheme to defraud the bank, the government must prove beyond a reasonable doubt that the defendant intended to defraud. Other bank fraud and false-statement charges turn on whether the defendant acted knowingly (and, for a false statement in a federal matter, willfully). The federal appeals court that covers New Jersey has said that a person found to have acted in good faith cannot also be found to have acted knowingly and willfully.

Agents, subpoenas and letters

A person asked by federal agents for a voluntary interview generally does not have to answer, but knowingly and willfully making a materially false statement to a federal agent can itself be a crime, even in an informal interview. A subpoena is a legal order that must be dealt with by its deadline. An SBA demand letter is a demand for payment, and ignoring it can lead to further collection action.

Destroying or concealing records to obstruct a federal investigation, even an anticipated one, is a separate crime.

What we do

We represent people in federal investigations and criminal charges involving PPP and EIDL loans. Civil matters, such as SBA collection, are reviewed case by case.