NEW JERSEY CRIMINAL LAWYERS

Tucson PPP and EIDL Loan Fraud Lawyers

The United States government enacted the Paycheck Protection Program (PPP) to provide aid to struggling businesses during the COVID-19 pandemic. However, some companies exploited the program’s loopholes, leading to widespread false claims and PPP loan fraud. Unscrupulous individuals became prevalent in using PPP loans, prompting the U.S. Department of Justice (DOJ) to actively investigate PPP loan fraud. Firms and persons accused of this kind of fraud must realize that this is a severe offense with potentially costly consequences.

PPP Loan Fraud: The High Cost of an Offense
The DOJ takes a stringent approach and vigorously prosecutes those accused of corporate or individual PPP loan fraud. False certification claims concerning PPP loan forgiveness, fraudulent PPP loan applications, or misuse of PPP loan funds are among the charges being targeted by the DOJ. The cost of the crime affects not only those involved but also the wider community.

Prosecution has begun for many individuals and companies suspected of committing PPP loan fraud, while more investigations are underway. People facing these legal accusations are tried for various offenses such as setting up shell companies, altering payroll documentation falsely to acquire PPP loans, utilizing PPP loans for personal luxuries, attempting to obtain several PPP loans for one firm, and other types of illegal activity surrounding PPP loans.

Collaboration between DOJ and Other Federal Agencies
The DOJ collaborates with numerous federal agencies like US Small Business Administration Office of Inspector General (SBA-OIG), Federal Deposit Insurance Corporation Office of Inspector General (FDIC-OIG), Federal Bureau of Investigation (FBI), and Internal Revenue Service Criminal Investigations (IRS-CI). Together they aim to prevent fraud under the Paycheck Protection Program by investigating individuals or businesses unlawfully taking advantage of it.

Potential Defense Strategies for Accused Companies and Individuals
Many potential defense strategies exist despite substantial risks from accusations related to PPP loan frauds. For instance, if your company legally obtained a PPP loan following appropriate usage, then creating segregated PPP loan accounts indicating compliance with PPP terms could lead to a faster and more favorable conflict resolution. Another viable defense can challenge the intention to defraud: if there was no intention to illegally secure a PPP loan or misuse PPP loan funds, the submitted PPP loan forgiveness certification is acceptable.

Federal Statutes Related to Charges Concerning PPP Loan Fraud
There are several federal statutes that could lead to charges concerning PPP loan fraud, such as making false claims through the Small Business Administration (SBA) or an FDIC-insured bank, wire fraud, tax evasion, bank fraud, conspiracy, False Claims Act violations, making false statements to federal agents and attempts at committing fraud.

The table below further highlights cases that are targetted by DOJ and potential charges linked with Federal PPP Loan Fraud Investigations:

**Table 1**
| DOJ Targeted Campaigns for Various PPP Loan Fraud Cases |
|:————————————:|:———————————————————————:|
| Shell Companies | Setting up shell companies to falsify payroll information to obtain PPP loans |
|PPP Loan Funds Misuse | Using PPP loans for personal luxuries instead of utilizing them properly |
|Multiple PP Loans | Attempting to receive several PP loans for one company|
|False Claims | Making false certification claims for PP loan forgiveness|

**Table 2**
|Potential Charges in Federal PPP Loan Fraud Investigations|
|:————————————:|:———————————————————————:|
|Misleading Statements To Federal Agents | False statements given out on SBA or FDIC insured banks |
|Wire Fraud |Using electronic communications methods towards fraudulent activities|
|Bank Fraud |Misrepresentations used when securing loans illegally |
|Aggravated Identity Theft |Misusing identities during unlawful acts facilitated by this crime |
|Tax Evasion |Raising illegal funds while evading payment of tax due |
|Conspiracy |Merging with another individual regarded as illegal to defraud lenders or government (DOJ, FBI) |
|Attempt |Acting towards committing fraudulent activities |
|False Claims Act violations |Presentation of claims that are fraudulent|

If your company or you become embroiled in such legal proceedings, it is advisable to hire the services of a proficient criminal defense attorney. An accusation relating to PPP loan fraud may result in severe reputational damage and substantial personal and financial losses. Todd Spodek is an experienced legal professional providing guidance through the entire process, help you achieve the possible result for your case.