COVID-19 and PPP Loans: Protect Your Business

What is PPP Loan Fraud?

PPP loan fraud is a federal crime that occurs when someone submits false information in an application or certification for a loan under the Paycheck Protection Program (PPP). This program was created to help businesses survive the COVID-19 pandemic by providing forgivable loans to cover payroll and operating expenses. Unfortunately, some businesses have taken advantage of this program and committed fraud.

How Can You Avoid PPP Loan Fraud?

At Spodek Law Group, we understand the devastating impact that a PPP loan fraud investigation can have on your business. That’s why we recommend that you follow these guidelines to avoid being accused of PPP loan fraud:

• Be honest on your application and certification
• Do not apply for PPP loans from multiple lenders
• Use PPP loan money only for approved purposes
• Submit truthful certifications for PPP loan forgiveness
• Cooperate with federal investigators, but speak to an attorney before speaking with them

What are the Penalties for PPP Loan Fraud?

The penalties for PPP loan fraud can be severe. Federal criminal statutes that can apply include making false statements to a federal agency, making false statements to the SBA, making false statements on a loan application, and bank fraud. Penalties for these statutes range from five to 99 years in prison and up to a $1,000,000 fine. Don’t risk your business and your freedom by committing PPP loan fraud.

How Can Spodek Law Group Help?

Our experienced attorneys have helped dozens of clients navigate PPP loan fraud investigations, often avoiding criminal charges altogether. When we represent a client in a PPP loan fraud case, we immediately contact investigators and any prosecutors involved in the case. We review the relevant documents, often with the assistance of experienced forensic accountants, to determine if we have a solid defense to any fraud allegations. We then explain the circumstances of our client’s situation to the government and offer information that the agents or prosecutor may not have known. In many cases, we can help our clients avoid criminal charges or negotiate the best possible resolution.

Our Defense Strategies

Our defense lawyers have extensive experience in PPP loan fraud investigations, and we know what rules and procedures apply to these cases. Here are the steps we take to help our clients:

Recent Developments in PPP Loan Fraud Investigations (Continued)

The Eastern District of Virginia is particularly active in prosecuting PPP loan fraud cases. In one recent case, the owner of a Virginia-based construction company was sentenced to 21 months in prison and ordered to pay $354,000 in restitution for committing PPP loan fraud. The owner, along with others, submitted multiple fraudulent PPP loan applications and used the money for personal expenses instead of for legitimate business expenses. In another recent case, a Maryland man was sentenced to over six years in prison for wire fraud and money laundering related to PPP loans. The man, who owned several businesses, submitted false applications for PPP loans and used the money to buy luxury items such as a Rolex watch and a Tesla.

As the government continues to investigate PPP loan fraud, it’s important for businesses and individuals to take the necessary steps to protect themselves. If you’re under investigation for PPP loan fraud, it’s crucial to contact an experienced attorney before speaking with federal agents. Our firm has helped numerous clients navigate PPP loan fraud investigations, and we have a deep understanding of the law and the procedures involved in these cases.

Contact Spodek Law Group for Assistance with PPP Loan Fraud Cases

If you or your business is under investigation for PPP loan fraud, it’s important to contact an experienced attorney as soon as possible. Our federal defense attorneys at Spodek Law Group have successfully defended clients in federal criminal cases across the United States, including in PPP loan fraud cases. We have a deep understanding of the law and the procedures involved in these cases, and we work tirelessly to protect our clients’ rights and interests.

Our team includes experienced paralegals and independent consultants who work closely with our attorneys to gather and review all relevant evidence and documents, interview witnesses, and build a strong defense strategy. We understand that every case is unique, and we take the time to listen to our clients and understand their goals and concerns.

At Spodek Law Group, we are committed to providing our clients with the highest level of service and representation. Contact us today for a confidential consultation with one of our experienced federal defense attorneys.

PPP Loan Fraud: What It Is and What You Need to Know

The Importance of PPP Loan Compliance

The Paycheck Protection Program (PPP) was created by the Coronavirus Aid, Relief and Economic Security (CARES) Act as a means of providing much-needed financial assistance to Americans who have suffered significant economic losses as a result of the COVID-19 pandemic. Unfortunately, some people and businesses in the United States have taken advantage of the COVID-19 crisis to commit fraud and illegally obtain PPP funds. If you find yourself being targeted by the federal government for PPP loan fraud, it is crucial that you seek the services of a knowledgeable and experienced PPP attorney.

At Spodek Law Group, we have a deep understanding of the law and the experience necessary to handle complex legal situations like PPP loan fraud. Attorney Todd Spodek and our team of skilled attorneys have what it takes to stand up against the federal government and protect your rights.

Understanding Fraud Charges: What You Need to Know

Nearly five million PPP loans were approved as of July 22, 2020, totaling more than $518 billion in funds. While most of these loan applications were made in good faith, some people and businesses may have taken advantage of the program to commit fraud and illegally obtain PPP funds. Fraud is a serious white-collar crime that involves intentional deception to secure unlawful gain.

Some people may have intentionally defrauded the PPP program, while others may have done so by mistake. For instance, you may have accidentally misclassified some of your employees as independent contractors or certified that you met the eligibility criteria without realizing that some of your expenses were not authorized. Regardless of whether you intended to commit fraud, you could still face serious consequences for PPP loan fraud.

What Constitutes PPP Loan Fraud?

The PPP program was created to provide forgivable, federally backed loans to small businesses with a legitimate financial need. However, some people and businesses may have fraudulently obtained PPP funds, fraudulently misused PPP funds, or fraudulently certified for loan forgiveness.

Fraudulently Obtaining PPP Funds

To obtain funds through the PPP program, businesses must make certain certifications about their eligibility for assistance and how the funds will be used. Some mistakes that could result in a PPP fraud indictment include obtaining PPP loans from multiple lenders, misrepresenting information on a PPP loan application, and misclassifying employees as independent contractors.

Fraudulent Misuse of PPP Funds

PPP funds can only be used to cover specific business expenses, such as payroll costs, interest on mortgage obligations, rent or lease payments, and utilities costs. PPP funds cannot be used for any other expenses, and at least 60% of the funds must be used for payroll costs. If you fraudulently use PPP funds for unauthorized business expenses, you could be charged with PPP loan fraud.

Fraudulent Certification for Loan Forgiveness

PPP loans can be 100% forgiven if the funds were used for authorized business expenses. However, if you fraudulently certify that you met the eligibility criteria and used the funds for authorized business expenses, you could be charged with PPP loan fraud if the information is false.

Are Cases of PPP Loan Fraud Being Investigated?

Yes. Almost immediately after the PPP program was introduced, the FBI and other federal law enforcement agencies began investigating fraudulent PPP loan claims. Since May, the Justice Department has charged more than a dozen individuals accused of defrauding the PPP loan program. The federal government is taking an aggressive stance against PPP loan fraud, and your business could be targeted in a PPP loan fraud audit or investigation.

What Kind of Fraud Crimes are Being Charged?

PPP loan fraud cases can involve several criminal offenses, including wire fraud, bank fraud, making false statements to a financial institution, and conspiracy to make false statements to the Small Business Administration. Other federal crimes that may be charged in connection to PPP loan fraud include computer fraud, identification fraud/identity theft, tax evasion, and making false statements to federal agents. Each of these fraud crimes is a felony offense carrying a potential punishment of up to 30 years in prison, substantial fines, and criminal forfeiture, among other penalties.

Skilled Legal Representation from a PPP Attorney

With billions of dollars at stake, federal agencies are aggressively investigating and prosecuting PPP loan fraud cases. If you find yourself facing a PPP loan fraud investigation, it is crucial that you seek immediate legal assistance from a skilled PPP attorney. At Spodek Law Group, we understand the complexities of federal fraud cases and have the experience necessary to represent you effectively. Our team of skilled attorneys can assess your criminal exposure and determine the best path forward based on your specific situation. Don’t wait to call – the consequences of a federal PPP loan fraud charge are severe.

Conclusion

PPP loan fraud is a serious white-collar crime that can result in severe consequences. The federal government is actively investigating and prosecuting cases of PPP loan fraud, and it is crucial that you seek the services of a knowledgeable PPP attorney if you are facing a PPP loan fraud investigation. At Spodek Law Group, we have the experience and expertise necessary to protect your rights and fight for the best possible outcome in your case. Contact us today to schedule a consultation with Attorney Todd Spodek and our team of skilled attorneys.