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Protecting Yourself and Your Business against DOJ Investigations for PPP Loan Fraud: What You Need to Know

The devastating effects of the COVID-19 pandemic led to many financially distressed small businesses completing PPP loan applications in search of much-needed support. The government reacted by introducing the Paycheck Protection Program (PPP) to provide a lifeline to struggling companies, offering forgivable, government-backed loans. Unfortunately, where there is support, there are often those willing to exploit and take advantage. Frauds aimed at these programs came quickly.

As a result, there were considerable misappropriations of hundreds of millions of dollars in forgivable PPP loans awarded to people who did not qualify or entities that weren’t eligible. Additionally, it became more evident that numerous borrowers allegedly misused the funds that the PPP lent them inappropriately.

What you need to know if you or your company faces a DOJ investigation for PPP loan fraud

A Department of Justice (DOJ) investigation regarding this matter is incredibly serious. Their focus lies on those suspected of either submitting false loan applications or using the funds they received from the program in unlawful ways. The DOJ filed charges concerning fraudulent behavior linked to several PPP loan fraud cases already. These were typically around offenses like submitting fake payroll reports and creating shell organizations with an intention to secure PPP loans.

To strengthen their efforts against PPP loan misuse further, DOJ joined forces with other federal agencies such as FBI, SBA-OIG, IRS-CI and FDIC-OIG with whom they collaborate vigorously investigating and prosecuting all cases involved.

If you find yourself facing scrutiny from the DOJ following allegations involved in any form of PPP loan fraud, seeking expert legal advice is most important. Our attorneys are highly experienced with defending clients facing these accusations since we have helped many deal with similar predicaments.

Both strictly adhering to Paycheck Protection Program terms and having specific defenses outlined in federal statutes serve as methods for building successful defense strategies against charges of PPP loan fraud in many cases.

Complying with the Paycheck Protection Program’s terms provides a primary defense strategy against a PPP loan fraud suit. Properly documenting the account and expenditure of funds from this loan is crucial to alleviate complications that could delay resolving the allegations. Inappropriate documentation can cause issues that attract charges related to civil violations under the False Claims Act and other statutes instead.

How to defend yourself: What you need to do

Defense against the DOJ for PPP loan fraud hinges very much on an individual’s intent, as many prosecutions rely on whether there was intent aimed at fraudulent behavior at all.

Common cases for these circumstances include individuals acquiring a PPP loan accidentally or misusing PPP funds unintentionally. They may have made improper certifications seeking loan forgiveness, which lacked fraudulent intent essential to build a strong defense in such scenarios. However, fines resulting from accidental occurrences can still be monumental, accompanied by treble damages, restrictions on eligibility for federal programs, among various other consequences.

The case above highlights that criminal provisions relating to PPP loan fraud fall under various pre-existing federal laws although they are absent within the Cares Act responsible for starting the Paycheck Protection Program (PPP).

Charges commonly presented by DOJ regarding accusations of PPP Loan Fraud

DOJ prosecutors can bring several criminal offenses related solely to PPP loan fraud via different avenues offenders might have committed. These range from bank fraud and wire fraud to false Claims Act Violations, making it ideal for anyone facing scrutiny regarding these matters to familiarize themselves with all possible scenarios, including:

– Making false statements towards an FDIC-insured bank or SBA
– Wire Fraud (18 U.S.C. § 1343)
– Bank Fraud (18 U.S.C §1344)
– Aggravated Identity Theft (18 U.S.C. § 1028A)
– Tax Evasion (26 U.S.C. § 7201)
– Attempt (18 U.S.C. § 1349)
– Making False Statements to Federal Agents (18 U.S.C. § 1001)
– Conspiracy (18 U.S.C. § 371, 18 U.S.C. § 1028A, and 18 U.S.C. §1349)
– False Claims Act Violations (31 U.S.C. §§ 3729 – 3733)

Why you need a competent attorney

Anyone facing DOJ scrutiny due to alleged involvement in PPP loan fraud should remain calm but act quickly by enlisting the services of an experienced attorney. Firms that specialize in defending against these PPP loan fraud cases understand better the intricate legal details involved.

The right attorneys can help you successfully build sound defense strategies while steering you through challenging defenses aimed at protecting your rights in every case’s outcome.

What You Should Do: Essential Tips

PPP loan recipients accused or under investigation for PPP Loan Fraud must take the initiative to protect themselves and their businesses by:

1.Hiring Competent Attorneys
Enlisting professional assistance is paramount when facing DOJ investigations concerning any PPP loan fraud accusations.

2.Comply with Paycheck Protection Program terms
Adhering strictly to Paycheck Protection Program-related terms builds a robust defense strategy against charges related to PPP loan fraud.

3.Be Careful What You Say
Always be mindful of information shared with the DOJ, only divulging information regarding cases where there is no false data representation associated with it.

4.Understand the DOJ’s Criminal Charges
Familiarize yourself with possible criminal offenses like wire or bank fraud when facing scrutiny over allegations related to PPP loan fraud.

5.Build A Strong Defense
Having strong defense strategies from reputable law firms prove very valuable towards effectively overcoming any accusations brought about by these investigations.

Find Your Way Out Of A Crisis

Experiencing scrutiny from any form of government-related agency concerned with investigating claims relating to potential fraudulent behavior aimed at Paycheck Protection Program (PPP) Loan applications can be overwhelming. However, the timely recruitment of expert legal representation from experienced counsel firms helps clients lay out sound defense strategies while protecting essential rights throughout.

At Todd Spodek Law Offices, attorneys work diligently towards providing clients with the possible solutions to cater to their needs in these circumstances. The firm’s proven track record makes it a popular option for PPP loan fraud case defendants seeking professional guidance and aid with all legalities involved. Contact the firm today for better assistance on defending yourself or your business to prevent undue complications arising from these accusations.