As the nation navigated the unprecedented challenges of the COVID-19 pandemic, the Paycheck Protection Program (PPP) was established to provide a lifeline for struggling small businesses. However, as our federal criminal defense attorneys have seen firsthand, the PPP also attracted a wide variety of fraudulent activity. From falsifying information on loan applications to misusing funds, these unscrupulous actions have not gone unnoticed by federal prosecutors.

Perhaps the most prevalent form of PPP fraud is application fraud. The CARES Act, which established the PPP, mandated that businesses provide accurate and truthful information on their applications, including the number of employees, employee payroll numbers, and the company’s salary and revenue. Providing false information on any of these points could result in criminal charges, particularly for companies that falsely claimed to have fewer than 500 employees or classified employees as independent contractors to qualify for the loan.

Another area of concern is the fraudulent use of PPP funds. The program was designed to help businesses pay for expenses such as rent, payroll, insurance, and utilities. Misusing the funds for personal expenses or luxury items instead of legitimate business expenses could result in criminal charges and the funds not being eligible for loan forgiveness.

In addition to fraud in the application and use of PPP funds, there have also been instances of fraud in the loan forgiveness certification process. To qualify for loan forgiveness, borrowers were required to certify that the loan was needed due to the pandemic, that the funds were used for the intended purposes, and that the business only received one loan. Providing false information or documentation in connection with a forgiveness application could lead to criminal charges.

Finally, some businesses have attempted to obtain multiple PPP loans from different lenders, which is prohibited by the program. This type of fraud is easily detected by the federal government and could result in criminal charges. As the government continues to scrutinize PPP loans, any business that borrowed from more than one lender should seek the advice of a criminal defense attorney immediately.

In conclusion, the Paycheck Protection Program was created to help small businesses during a difficult time but unfortunately, it also attracted fraud. Businesses must be very careful when applying for and using PPP loan, and should seek legal advice if they are unsure about any aspect of the process. Federal prosecutors are aggressively pursuing criminal charges for any fraudulent conduct related to the Paycheck Protection Program, and businesses found to be in violation of the program’s rules could face significant consequences.

Albuquerque PPP and EIDL Loan Fraud Lawyers

As the world continues to grapple with the devastating effects of the COVID-19 pandemic, small businesses have been hit particularly hard. In an effort to provide financial relief to these businesses, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which established the Paycheck Protection Program (PPP) to offer forgivable loans to small businesses. However, as with any large-scale government program, fraud has emerged as a significant concern.

The PPP was created to help small businesses maintain their workforce, access working capital, and keep operations running normally during the pandemic. However, in the haste to get relief to businesses, some individuals and companies took advantage of the program by fraudulently obtaining loans. The government has responded by vigorously investigating and prosecuting allegations of PPP loan fraud, with entire sections of the Department of Justice dedicated to these investigations.

If you or your company are facing PPP loan fraud charges, it is crucial that you retain an experienced attorney as soon as possible. At our law firm, our criminal defense lawyers will gather all the necessary information, including evidence the government has against you, to review whether you have a strong defense against any allegations of fraud. We will reach out to the federal prosecutor or agents assigned to your case and provide them with information that can make a beneficial impact on your case.

Examples of PPP loan fraud include but may not be limited to: loan application fraud, loan stacking, fraudulent loan certification, using funds for ineligible purposes, and concealing or misrepresenting information during an audit. These actions can result in a range of charges, including making a false statement, bank fraud, and wire fraud, all of which carry severe penalties, including fines, imprisonment, and restitution.

At our law firm, we know what the government looks for in PPP loan fraud cases and will use this knowledge to your advantage. We will work tirelessly to reach a resolution that doesn’t involve formal criminal charges, and if charges have already been brought against you, we will aggressively negotiate and defend you at trial. With our help, you can navigate the complex legal landscape surrounding PPP loan fraud and protect your rights and interests.