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Virginia PPP and EIDL Loan Fraud Lawyers

The Significance of Staying Informed About DOJ Investigations on PPP Loan Fraud
The outbreak of the Coronavirus pandemic left businesses reeling from unprecedented economic damage, prompting the U.S. government to launch the Paycheck Protection Program (PPP) aimed at providing financial support to affected organizations. However, fraudulent activities proliferated within the PPP, with several ineligible individuals/enterprises qualifying for forgivable loans while others used their funds on unapproved expenses. Consequently, the United States Department of Justice (DOJ) launched investigations to reveal instances of PPP loan fraud. In this article, we outline what individuals and companies undergoing DOJ investigations for PPP loan fraud need to know.

The Severity Attached to PPP Loan Fraud by DOJ
The U.S. Department of Justice takes PPP loan fraud seriously and intends to prosecute anyone found guilty of exploiting the program to the fullest extent permissible under law. The DOJ has gone on record stating that “The Paycheck Protection Program was designed to assist Americans tormented by financial hardship during the pandemic. Our office will be relentless in targeting those who defraud this crucial program.”

DOJ’s Active Investigations into PPP Loan Fraud Cases
To date, the DOJ has filed charges against several cases involving PPP fraud, including setting up shell companies and falsifying information, using loan funds for personal expenses, making attempts at obtaining multiple loans under different names or via other fraudulent activities.

Various Federal Agencies Collaborate with DOJ to Combat PPP Loan Fraud
Numerous federal agencies collaborate with the DOJ in these efforts against cases featuring PPP loan fraud allegations. These institutions include 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). This collaboration ensures that every unlawful act in connection with participation in the PPP program is prosecuted through established legal channels.

Defense Tactics for Companies Accused of PPP Loan Fraud
DOJ investigations on PPP loan fraud typically create significant risks for organizations, but these accused companies can defend themselves through various means. Approaches include establishing a demonstration of compliance with the PPP program’s guidelines, an absence of intent to engage in fraudulent activities, and other specific strategies to address the charges.

Potential Charges for PPP Loan Fraud
PPP loan fraud may result in civil and criminal charges under existing federal clauses that cover bank fraud, wire fraud, identity theft (in its aggravated form), making false claims/statements or evading taxes (where applicable), conspiracy, False Claims Act violations or attempts.

Critical Next Steps for Companies Suspected of PPP Loan Fraud
Given the severe penalties that come with DOJ investigations into such allegations against companies, it is essential to engage attorneys well-versed in legal issues surrounding such cases. Legal counsel provides guidance and helps develop potential defense strategies that could lead to favorable outcomes for companies. This approach proves even more critical during the early investigative stages since DOJ could exercise various powers like subpoenas and search warrants on suspect individuals or organizations. At this point, consultations with legal counsel are essential to avoid any mishaps.

Table 1: Federal Agencies Collaborating with DOJ
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| Small Business Administration Office of |
| Inspector General (SBA-OIG) |
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| Federal Deposit Insurance Corporation Office |
| of Inspector General (FDIC-OIG) |
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| Federal Bureau of Investigation |
| (FBI) |
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| Internal Revenue Service Criminal Investigations |
| (IRS-CI) |
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Table 2: Potential Charges for PPP Loan Fraud
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| Civil | Criminal |
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| False Claims Act | Bank Fraud |
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| | Wire Fraud |
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||Identity Theft | Making false statements |
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|| | Tax evasion or crimes related to tax payments |
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|| | Conspiracy |
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|| | Attempts |
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