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Protecting Yourself Against DOJ Investigations for PPP Loan Fraud

The COVID-19 pandemic has brought about unprecedented financial challenges, with businesses struggling to keep their operations running amidst the health crisis. The federal government responded by creating the Paycheck Protection Program (PPP) to provide financial assistance to businesses in need. However, fraudsters saw an opportunity to take advantage of this program and commit PPP loan fraud, causing the Federal Bureau of Investigation (FBI), Internal Revenue Service Criminal Investigations (IRS-CI), Federal Deposit Insurance Corporation Office of Inspector General (FDIC-OIG), U.S. Small Business Administration Office of Inspector General (SBA-OIG), and the U.S. Department of Justice (DOJ) to launch investigations and criminal charges.

Here are some essential things you should know about DOJ investigations for PPP loan fraud so that you can protect your business from costly legal battles.

The DOJ is Aggressively Pursuing Individuals and Companies Involved in PPP Loan Fraud

The DOJ remains committed to unmasking fraudulent activities related to PPP loans and imposing penalties on those involved. Charges related to forging documents, using loan funds improperly, and acquiring fraudulent loans have been filed against individuals and businesses alike. As a result, it’s more critical now than ever before for individuals and businesses genuinely in need of such funds always to comply with all requirements set out under the Paycheck Protection Program.

Fight or Flight: Defensive Strategies Against Allegations of PPP Loan Fraud

Individuals and companies who face allegations of PPP loan fraud must seek legal guidance from experienced lawyers as some applications may require significant evaluations. While much can be done on defense based on factual evidence provided that can prove lawful acquisition of PPP loans, maintaining correct documentation also saves faces where valid expenses are lost or misinterpreted leading to accusations into other crimes they did not intend or commit—for instance, Intent-to-defraud Defense response when someone mistakenly obtained a fraudulent loan unknowingly but could rely on proving lack of intent during faceoff in the court trial.

Collaboration Between Federal Law Enforcement Agencies to Identify PPP Loan Fraud

The DOJ is working with other federal law enforcement agencies such as the FBI, IRS-CI, FDIC-OIG, and SBA-OIG to identify activities related to PPP fraud. This partnership works to ensure that individuals and businesses are scrutinized appropriately while attempting to apply for federal-backed loans. Therefore, anyone seeking a PPP loan should take all necessary precautions not only when using loan funds but also when applying because any criminal tendency could trigger an investigation by any of these bodies leading to serious misconduct charges.

Possible Charges for PPP Loan Fraud – Statutes

Federal statutes define several possible charges that can be imposed on anyone who violates PPP-related laws. The following allegations are potential consequences for individuals and companies that breach structured policies:

Table: Possible Charges for PPP Loan Fraud Statutes

Statute Possible Charges Paycheck Protection Program (PPP) Loans Fraud

18 U.S.C. § 1014 Making false statements to influence decision-making process of Small Business Administration or FDIC-insured bank
18 U.S.C. § 1344 Bank fraud by submitting fraudulent information with the intention of defrauding financial institution
18 U.S.C. § 1343 Wire fraud through electronic communication using deceitful means to obtain property or money
18 U.S.C. § 1028 Using counterfeit identities or stolen information in committing a crime like bank and wire fraud?
26 U.S.C. § 7201 Tax Evasion resulting from making illegal claims on payroll expenses paid with PPP loans unreported as income on tax returns filed
False Claims Act Violations falsification and misrepresentations resulting from programs offered under government administration

Here’s What You Need To Know When Facing a DOJ Investigation After Committing PPP Loan Fraud

Investigations arising out of alleged involvement in PPP loan fraud matters must be handled by experienced legal representatives of law firms. Facing such an inquiry can be a frightening ordeal, but the Spodek Law Group has reliable attorneys to guide individuals and businesses through every step of the process.

At Spodek Law Group, our focus is on providing support to individuals and companies facing such accusations by giving effective counsel on possible ways out of investigations that will minimize potential consequences while ensuring compliance with DOJ regulations. Our clients can rest assured that their legal needs are being taken care of by a team of experienced lawyers.

Conclusion

PPP loan fraud allegations can have severe implications for your business with potentially significant costs in legal fees, fines, and even imprisonment. Therefore for anyone hit by the investigations, it’s always wise to engage professional assistance from qualified and experienced attorneys who understand the terrain well enough and can effectively create actions tailored uniquely to every client. At Spodek Law Group, our team ensures that our clients receive effective legal representation during all phases of any PPP loan fraud investigation or prosecution to achieve fair outcomes in settlement.