SBA Increases Maximum Fraud Claims to $1 Million Under New Administrative False Claims Rule Effective May 2026

Linda McMahon serves as the Administrator of the United States Small Business Administration where she oversees support for small businesses across the country. On March 19 2026 the Small Business Administration published a direct final rule amending its Program Fraud Civil Remedies Act regulations at 13 Code of Federal Regulations Part 142. Schwabe Williamson and Wyatt reports this change aligns the rules with the Administrative False Claims Act of 2023 also known as Public Law 118-159 section 5203.The rule renames the Program Fraud Civil Remedies Act to the Administrative False Claims Act throughout the regulations. It raises the maximum claim amount the agency can pursue administratively from 150000 dollars to 1000000 dollars. This threshold will adjust for inflation over time under the Federal Civil Penalties Inflation Adjustment Act.A key update adds liability for reverse false claims. These involve actions to avoid paying money owed to the government such as concealing overpayments or obligations. The definition of claim now includes requests that decrease duties to transmit money property or services to the government. It adopts the False Claims Acts standard for material meaning capable of influencing payments.The statute of limitations expands to the later of six years after a claim is made or three years after the agency knows or should know key facts but no later than ten years total. This discovery rule aids enforcement during audits like the ongoing review of the 8(a) Program.The rule requires notifying the Attorney General 30 days before settling cases or referring them for adjudication. It also sets a three-year limit for civil recovery after liability decisions.Effective May 4 2026 unless adverse comments arrive by April 20 2026 this strengthens the agencys tools against fraud by contractors including 8(a) participants Alaska Native Corporations tribes and Native Hawaiian Organizations. Comments go to the Federal eRulemaking Portal under docket SBA-2026-0067.Thank you listeners for tuning in and remember to subscribe. This has been a quiet please production for more check out quiet please dot ai.For more http://www.quietplease.aiGet the best deals https://amzn.to/3ODvOtaThis content was created in partnership and with the help of Artificial Intelligence AIThis episode includes AI-generated content.