NEW JERSEY CRIMINAL LAWYERS

Colorado Springs PPP and EIDL Loan Fraud Lawyers

Protect Your Business from DOJ Investigation for PPP Loan Fraud

As the COVID-19 pandemic rages on, businesses have been hugely affected. In response, the U.S. Congress introduced the Paycheck Protection Program (PPP) to offer financial aid to fragile companies. Eligible businesses proactively applied for PPP loans, enabling them to pay their employees and avoid layoffs amid rapidly changing economic conditions.

Unfortunately, fraudsters have also taken advantage of this government initiative by engaging in PPP loan fraud – a phenomenon that exposed the program’s vulnerability before it could reach enough businesses. Companies and individuals received fraudulent PPP loans by manipulating loan application criteria, causing the US Department of Justice (DOJ) to launch numerous investigations into suspected participants involved in this wrongdoing.

If your business is bruised with allegations of impropriety involving PPP loans, here’s what you need to know:

What is a DOJ Investigation for PPP Loan Fraud?

The DOJ global agenda is squarely fixed on prosecuting entities that committed fraud by submitting an illegitimate or intentionally false PPP loan application or misappropriated funds meant expressly for COVID-19 relief purposes.
Federal agents are investigating and collecting evidence to support charges against these companies or individuals accused of criminal offenses.

It may interest you to know that amidst rampant fraudulent behaviors surrounding the program involving various entities who took inappropriate advantage of PPP loans, the DOJ has made its objectives clear.

They are intent on ensuring anyone that took undue advantage of this program will face aggressive targeting and prosecution.

Potential Charges in Federal PPP Loan Fraud Investigations

PPP loan fraud can result in violating multiple civil and criminal laws at the federal level. The DOJ rarely hesitates to prosecute fraudulent activities under several federal laws:

1. Making False Statements to SBA (18 U.S.C.§ 1014)
2. Making False Statements to an FDIC – Insured Bank (18 U.S.C.§ 1014)
3. Bank Fraud(18 U.S.C.§ 1344)
4. Wire Fraud(18 U.S.C.§ 1343)
5. Aggravated Identity Theft(18 U.S.C.§ 1028A)
6. Tax Evasion (26 U.S.C.§ 7201)
7. Making False Statements to Federal Agents (18 U.S.C.§ 1001)
8. Conspiracy (18 U.S C§§371&1349)
9. Attempt (18 U.S C§§ 371&1349
10. False Claims Act Violations(31U.S C §§3729-3733)

Defenses Against DOJ Investigations for PPP Loan Fraud

It’s not all gloom and doom as despite the apparent allegations of fraud, defense attorneys can assert viable defenses against the PPP loan fraud charges that are either specific to the PPP or focused on specific charges.

Demonstrating PPP Compliance

Companies and individuals facing charges of PPP loan fraud should prioritize explaining compliance with terms related to PPP loans’ acceptance before progressing to handle other aspects.

Lawful recipients of a PPP loan can establish a segregated account where funds will be deposited, thereby avoiding any issues or potential risks and present documentary evidence indicating appropriate intent behind fund use.
However, companies must be cautious when disclosing information to the DOJ or any federal investigator because information revealed, which tends to incriminate them, may elevate the company’s risk of prosecution for PPP loan fraud beyond percentages forecasted.

Lack of Intent Defense in PPP Loan Fraud Cases

Individuals and companies can assert lack of intent defense against charges leveled at them during investigations involving alleged fraudulent practices(s) surrounding a COVID-19 relief program like the Paycheck Protection Program.

Here, it is necessary; however, if considered eligible, it was not intentional – unless it conflicts with an explicit regulation within guidance issued by one or more administering agencies concerning eligibility criteria based on applicable law(s).

Consequences of Being Found Guilty

PPP loan fraud is a severe offense that carries a harsh penalty for perpetrators. Businesses found liable or guilty of PPP loan fraud could face civil and criminal prosecution, which can lead to devastating consequences.

Embattled businesses facing the consequences of PPP loan fraud allegations should seek legal advice and understand its criticality firsthand.

Conclusion

Fraudulent practices involving PPP loans can not only cause significant financial losses but also result in huge civil and criminal liability under federal laws when caught.
The DOJ has already initiated numerous investigations against companies and individuals involved in the program’s impropriety.

Thus, it is wise that if your institution faces charges or allegations of onus surrounding PPP loans, getting legal counsel such as attorneys with experience representing clients accused of white-collar crimes to help you navigate through the investigation process is critical. This will ensure that you are aware of potential charges coming up and the defense strategies available for the case at hand.