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

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."