While the COVID-19 pandemic may feel like a distant memory for many, its effects continue to reverberate for others—particularly for businesses that obtained loans through the Paycheck Protection Program (PPP). Whether forgiven or not, these loans remain subject to scrutiny. The Small Business Administration (SBA) and the Department of Justice (DOJ) can pursue criminal or civil charges against individuals involved in PPP loan fraud for up to ten years after the offense. Borrowers should ensure they maintain all relevant documentation and engage legal counsel immediately upon receiving a subpoena or document request to mitigate risks.
1. Records Retention and Statute of Limitations
PPP forgiveness applications require borrowers to retain all documentation supporting their initial loan application, including certifications of the loan’s necessity and eligibility (such as gross receipt reduction certifications for Second Draw PPP Loans, if applicable). Borrowers were also required to keep records supporting their loan forgiveness applications and demonstrating compliance with PPP requirements for six years after the loan was forgiven or repaid in full. However, lenders are required to keep all data for up to 10 years, which is the full statue of limitations for any investigation or claw-back of PPP funds. Authorized SBA representatives, including the SBA Office of Inspector General (OIG), may request access to these files during this period. We anticipate that any final loan...
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