Lawmakers take action after report shows Biden-era SBA failed to probe 2 million alleged COVID aid fraudsters
Sen. Joni Ernst of Iowa and Rep. Roger Williams of Texas, both Republicans, plan to introduce the SBA Fraud Enforcement Extension Act on Wednesday in hopes of corralling the alleged scofflaws who they say broke the law and prevented untold numbers of legitimate U.S. small businesses from receiving crucial aid.
The bill extends the statute of limitations to 10 years for fraud surrounding the Shuttered Venue Operators Grant (SVOG) and the Restaurant Revitalization Fund relief programs instituted in 2020.
In 2022, Williams, Ernst and other lawmakers sought to do the same to identify potential scofflaw violators of the Paycheck Protection Program.
A report from the nonpartisan Government Accountability Office (GAO) found that the Biden-era Small Business Administration (SBA) either signed or guaranteed more than $1 trillion in loans to more than 10 million small businesses.
While it had instituted a four-step process to manage fraud, that plan reportedly faltered when the SBA inspector general was unable to fully probe two-thirds of the risk referrals because the agency didn't provide either correct or complete information about those cases.
The GAO then made a formal recommendation to the SBA, which, according to the public watchdog's website, remains "open" – and it appeared no action had at least been recorded.
The GAO also found that the fraud prevention process had not been fully implemented until "more than half" of aid programs' funding had been approved.
"I will not allow criminals to run out the clock and escape justice simply because the Biden administration was asleep at the wheel," Ernst told Fox News Digital on Tuesday.
"Thousands of hardworking small businesses were deprived of desperately needed relief because swindlers, gang members, and felons cashing in on COVID drained the programs. Every single con artist who stole from taxpayers will be held accountable."
In Ernst's home state, 1,800 restaurants reportedly qualified for SBA aid but never received it, prompting critics to question how much funding was diverted to fraudulent applicants instead of family-run eateries.
In Williams' Lone Star State, federal aid allowed tens of thousands of restaurants to stay in business, but others told outlets like Houston PBS that such funding ran out before many could get back on their financial feet.
The Texas Restaurant Association told the station that 12,000 restaurants found themselves in danger of closing by 2022.
Hollywood celebrities had also received some of the SVOG funds and spent them on private jets and parties or cash for themselves, Business Insider reported.
"The SBA distributes millions of dollars to small businesses in need every year. However, where small business owners found the capital needed to stay afloat during the COVID-19 pandemic, bad actors saw the opportunity to defraud the government," Williams told Fox News Digital.
"It is imperative that every fraudster who stole and exploited taxpayer dollars during our nation's utmost hour of need be prosecuted to the full extent of the law."
He added that as March marked five years after the first COVID lockdowns, an extension of the SBA and law enforcement's ability to pursue fraudsters must be realized.
Fox News Digital reached out to the SBA for comment.
When asked about the discrepancies found in the GAO report, an SBA spokesperson told Fox News Digital that Administrator Kelly Loeffler has already taken action to enhance fraud prevention efforts.
"The SBA fully supports all efforts to crack down on fraud within its loan programs – in stark contrast to the last administration, which failed to investigate or address more than $200B in estimated pandemic-era fraud," Caitlin O'Dea said.
"[SBA] will continue working to hold pandemic-era fraudsters accountable."
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