U.S. House approves bills targeting pandemic relief fraud that impacted dozens of Johnson Countians

pandemic relief loans

Somebody used Suzanne Sanders' name and Lenexa home address to secure more than $9,000 in federal pandemic relief aid, and now Sanders gets monthly reminders from the Small Business Administration to pay the money back. File photo credit Leah Wankum.

Kansans who have been victims of pandemic relief-related fraud, including some Johnson Countians, may soon have a longer window in which to potentially seek justice. 

What happened: On Wednesday, the U.S. House of Representatives passed two bills co-sponsored by Democratic Rep. Sharice Davids that extend the statute of limitations on two particular types of pandemic-era fraud cases. 

  • Both bills passed on roll call votes either unanimously or nearly unanimously and now go before the U.S. Senate.

Why it matters to Johnson County: As first reported last year by the Shawnee Mission Post, nearly $1 million in fraudulent pandemic relief loans were taken out under the names of Johnson County homeowners during roughly the first year of the pandemic. 

  • The loans were made available to small businesses, including agricultural operations, so that the owners could pay basic operating expenses, such as inventory or office supplies.
  • But the Post found dozens of Johnson County property owners whose names and personal information was used without their knowledge to apply for loans to apparently non-existent or fake farm businesses.
  • Following that, Davids advocated for the Johnson Countians who had been affected to be “held blameless” and called for the Small Business Administration to investigate. 

How the bills work: The House passed two bills — the PPP and Bank Fraud Enforcement Harmonization Act and the COVID-19 EIDL Fraud Statute of Limitations Act of 2022

  • The first would establish a 10-year statute of limitations for all fraud related to the Paycheck Protection Program, a nearly $1 trillion program that allowed small businesses to take out low-interest loans in order to keep paying employees during the first year of the COVID-19 pandemic. The new law would apply to alleged fraud regardless of whether it came from a bank of a fintech financial technology company.
  • The second bill passed this week would do the same for fraud cases involving Emergency Injury Disaster Loans (EIDL), including those used for COVID-19 relief.

What it changes: Without these two measures, many PPP and EIDL fraud cases are considered wire fraud and only have a statute of limitations of five years. 

  • Compared to the 10-year timeframe that typical bank fraud cases have to be investigated, lawmakers — including Davids — have voiced concerns about this discrepancy. 

Key quote: “These bipartisan bills will provide federal, state, and local law enforcement agencies with ample time to identify and prosecute fraud,” Davids said in a taped message. “We can’t let up on our oversight of taxpayer dollars and I’ll continue to target waste and abuse in the system where possible.”