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- The US government spent $5 trillion to stimulate the economy during the pandemic.Much was lost to fraud, and several bills would extend deadlines to file charges.A bill involving the Shuttered Venue Operators Grant, which BI previously reported on, moved forward Wednesday.
A Senate committee on Wednesday advanced a bill that would give prosecutors more time to bring fraud charges tied to two pandemic-era relief programs — including one that, as Business Insider has reported, awarded millions of dollars to wealthy musicians who used the money on private jets, luxury goods, and parties.
Federal investigators believe at least 6% of the $5 trillion allocated for pandemic relief was routed to fraudsters or people and businesses who didn't qualify. Prosecutors have brought charges over a small fraction of that spending, and could run out of time to bring charges in thousands of cases that were referred to them.
Currently, prosecutors have five years after many fraud-related crimes occur to bring charges. The bill would give them an extra five years to file criminal charges against anyone who defrauded the $28 billion Restaurant Revitalization Fund or the $14 billion Shuttered Venue Operators Grant.
Originally pitched as a lifeline for independent venues and arts groups, the SVOG program ended up awarding billions with limited guardrails, and a Business Insider investigation found that pop stars like Chris Brown, Lil Wayne, and Marshmello used the money for jets, bonuses, and a birthday bash.
Sen. Joni Ernst of Iowa, who chairs the Small Business Committee that moved the bill forward, told Business Insider that the government should be "going after the people that truly didn't deserve the money."
"What we saw was a lot of celebrities that were gaming the system," she said, "that were able to take those dollars and buy jets and throw fancy parties and do things like that — boost up their wardrobe. That's not what the dollars were for."
The celebrities Business Insider reported on didn't previously reply to comment requests, except for Lil Wayne, who responded to a reporter's questions with an explicit sexual overture. The SBA has defended its fraud controls and said in late 2024 that it was still looking into some grants.
The agency has recently sent out hundreds of letters to SVOG grantees demanding that they repay their grants, according to people in the entertainment industry, but details on which grantees were targeted were not available.
Maggie Clemmons, an agency representative, told BI that the SBA is "continuously fighting to claw back fraudulently-obtained COVID funds, including within the SVOG program" and criticized "inaction" by the Biden administration.
The Restaurant Revitalization Fund, which cut checks of up to $10 million, has been scrutinized by auditors. Nearly a quarter of funds were awarded without doing enough to verify that grantees were eligible, the Small Business Administration's inspector general said last year, and the agency found that improper payments were "likely" in 53 out of 122 restaurant awards it analyzed.
The bill still needs to pass the Senate and House of Representatives before it becomes law. And even if the statute of limitations to bring charges is extended, whether prosecutors will clear out the backlog of pandemic-fraud cases is an open question. The agency's inspector general has said the SBA should also extend the time period for which grant recipients hold on to their records.
"My hope would be that given the priorities of the Department of Justice, that somewhere in that mix, we have those that will go after the fraudsters," Ernst said. "Fraud is fraud, and our taxpayers really need to know that the federal government takes it seriously."
The Ernst bill, the SBA Fraud Enforcement Extension Act, advanced without opposition from Democrats.
In 2022, lawmakers similarly extended the deadline to bring fraud charges over the Paycheck Protection Program and Economic Injury Disaster Loans from five years to 10.
Congress also allocated at least $653 billion to fund extra unemployment benefits during the pandemic. The House of Representatives passed a bill in March to allow more time to prosecute unemployment benefit fraud, but that bill hasn't advanced in the Senate.
