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Companies and individuals who have been accused of committing Paycheck Protection Program (PPP) loan fraud could face severe consequences, including civil and criminal charges, loss of federal program eligibility, treble damages, and other penalties. The Department of Justice (DOJ) has been investigating several cases related to PPP loan fraud and is actively pursuing criminal complaints against individuals and businesses involved in fraudulent activities.
The DOJ is prosecuting individuals and companies for a broad range of federal offenses against PPP loan fraud. The DOJ works with other federal agencies, such as the U.S. Small Business Administration Office of Inspector General, Federal Deposit Insurance Corporation Office of Inspector General, Federal Bureau of Investigation (FBI), and Internal Revenue Service Criminal Investigations to identify and prosecute suspects who have taken advantage of federally-backed loans offered under the PPP.
The number of charges already filed for PPP loan fraud indicates that there is a substantial probability that companies and individuals may face an investigation for alleged PPP loan fraud. The risks are enormous if you are charged with any offense related to PPP loan fraud.
In defending against allegations, it is essential to demonstrate compliance with the terms offered by the PPP forgivable loans for businesses after demonstrating compliance with set terms. However, your company needs to be cautious when asserting its innocence while providing information to the DOJ. It is imperative to leverage arguments such as lack of intent to defraud which can considerably decrease your company’s criminal liability.
PPP loan fraud can be prosecuted under various federal statues, mandatory penal provisions involving civil and criminal charges. Below are some possible charges that may result from investigations into PPP loan fraud;
| Statute Number | Name of Statute |
|---|---|
| 18 U.S.C. § 1014 | Making False Statements to the SBA or FDIC-insured Bank |
| 18 U.S.C. § 1344 | Bank Fraud |
| 18 U.S.C. § 1343 | Wire Fraud |
| 18 U.S.C. § 1028A | Aggravated Identity Theft |
| 26 U.S.C. § 7201 – (Tax Evasion) | Tax Evasion/ Criminal Liability for Tax-related offenses |
| 18 U.S.C. § 1001 – Making False Statements to Federal Agents . . . . | Making False Statements to Federal Agents During Federal Inquiry . . . Total Items: 10 |
PPP loan fraud is a severe offense that could result in significant penalties by the DOJ. Being found guilty could lead to civil and criminal charges, loss of federal program eligibility, treble damages, among other consequences. In the face of any allegations, it is essential to be aware of the potential defenses and charges that you or your company may be facing during investigations. It’s to work with an experienced legal team with a proven track record of successfully defending clients against similar accusations.
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