NEW JERSEY CRIMINAL LAWYERS

Maine PPP and EIDL Loan Fraud Lawyers

What to Do When Facing an Investigation for PPP Loan Fraud

The COVID-19 pandemic compelled the United States government to take measures to protect small businesses from imminent collapse. One such measure was the creation of the Paycheck Protection Program (PPP). Although well-intentioned, this program had its fair share of fraudulent activities. Unethical individuals used PPP loans to finance ineligible costs or falsely obtained them. The result is a spate of investigations by the United States Department of Justice (DOJ), which has left many individuals and companies facing charges.

If you or your company is currently under investigation for PPP loan fraud, here are some essential points to consider:

The DOJ Takes PPP Loan Fraud Seriously

The DOJ understands how much small businesses suffered because of the pandemic, making its commitment to pursuing those who commit PPP loan fraud even more critical. It actively investigates any suspect activity that involves fraudulently obtaining loans or using funds for expenses not covered by PPP.

Multiple Charges Have Been Filed in Numerous Cases

The DOJ means business when it comes to prosecuting those responsible for PPP loan fraud. Several indictments have been filed against people implicated in different scams, including creating shell companies, falsifying documents and payroll information, submitting multiple PPP loan applications, and misusing funds.

Federal Law Enforcement Agencies Are Collaborating

To combat and stamp out any fraudulent activities associated with PPP loans, the DOJ works closely with other federal agencies like SBA-OIG, FDIC-OIG, FBI, and IRS-CI.

Potential Defenses Against PPP Loan Fraud Charges

People and companies accused of PPP loan fraud might face severe consequences if found guilty. Here are some defenses that could help their cases:

Demonstrating Paycheck Protection Program Compliance

Companies with evidence on their side that they legally received their PPP loans complied with all necessary regulations and used them as stipulated within guidelines stand a better chance at avoiding getting charged.

Lack of Intent to Defraud

Federal criminal liability generally requires an intention to defraud, which could provide a valid defense if it’s proven that the accused did not intend to commit fraud.

Potential PPP Loan Fraud Charges To Expect

Even though the CARES Act provided no provisions against PPP loan fraud, other pre-existing statutes have applicable civil and criminal penalties against fraudulent activities. They include:

[table]
Charge | Description
False Statements to the Small Business Administration (SBA) (18 U.S.C. § 1014) | Penalties for knowingly providing false statements or reports that influence SBA’s action Any inaccuracies in Borrower Application Forms or certifications for loan forgiveness could result in a charge.
False Statements to an FDIC-Insured Bank (18 U.S.C. § 1014) | Prohibits submitting inaccurate statements or reports to financial institutions insured by the FDIC.
Bank Fraud (18 U.S.C. § 1344) | Bans schemes aimed at defrauding financial institutions or obtaining money through deception, misrepresentation, or promises.
Wire Fraud (18 U.S.C. § 1343) | Makes it illegal to use any online means of communication in a scheme intended to deceive people or obtain funds falsely.
Aggravated Identity Theft (18 U.S.C. § 1028A) | Forbids knowingly transferring, possessing, or using someone else’s identification details in connection with felonies such as bank and wire fraud.
Tax Evasion (26 U.S.C. § 7201)| Makes it unlawful for individuals and companies to evade taxes imposed by the Internal Revenue Code intentionally.
False Statements to Federal Agents (18 U.S.C. § 1001)| Bans giving misleading information during federal investigations, covering up relevant details, making false statements, or attempting concealing materials facts about prohibited acts like PPP loan frauds that amounts trickery against America’s government programs
Conspiracy (18 U.S.C. § 371 and 18 U.S.C. § 1349)| Allows the prosecution of businesses involved in fraudulent attempts to obtain federal funds under PPP loans.
Attempt (18 U.S.C. § 1349) | Penalizes unsuccessful or incomplete efforts to commit fraud related to PPP loan applications, though it never materializes into much substantial harm caused by successful fraudsters.
False Claims Act Violations (31 U.S.C. §§ 3729 – 3733)| ows both civil and criminal punishments for cheating America’s government programs or making deceitful statements by obtaining program money through treacherous behavior
[/table]

Conclusion

People accused of PPP loan fraud face severe implications, including potential criminal and civil charges that could adversely impact their lives and reputations beyond repair. If you haven’t yet sought counsel, it’s essential that you speak with an experienced attorney as soon as possible. Look for legal representation that will help mitigate any serious damages done to your life, livelihood, or reputation by exploring available defense options promptly.