Last Updated on: 28th July 2023, 07:21 pm

The Paycheck Protection Program (PPP) loan fraud is a federal crime that occurs when individuals and businesses falsely obtain money through the CARES Act. As of April 2020, small businesses affected by COVID-19 and with fewer than 500 full-time employees were eligible for up to $10 million in relief to cover expenses such as payroll, mortgages, rent, and utilities for eight weeks. The government would forgive the debt if the money was used for these “qualified expenses.” However, cheating the Small Business Administration (SBA) out of this stimulus money is a serious federal felony that carries potential prison time, fines, and repayment of the loan.

One of the most common forms of PPP loan fraud is application fraud. In order to be eligible for PPP funding, a business had to certify that it had fewer than 500 employees, a “small business” as defined by the SBA. Companies might misclassify full-time employees as contractors to fall below the 500-employee threshold, or misrepresent the size of their payrolls to improperly secure more funding under the program.

However, defendants facing PPP loan fraud charges can argue that they had no intent to defraud or that the SBA made a mistake. Accidentally providing false information on a loan application, for example, is not a crime if the defendant had no intent to defraud. Additionally, errors by the SBA are not uncommon and keeping all records, such as email communications, voicemails, bank statements, accounting notes, receipts and bills can serve as valuable proof of innocence if a false accusation is made.

It is important to note that non-citizens convicted of CARES Act fraud are vulnerable to deportation as fraud involving more than $10,000 is an aggravated felony and a crime involving moral turpitude. Therefore, aliens facing criminal charges should seek legal counsel as soon as possible.

In summary, PPP loan fraud is a serious federal crime that can lead to severe consequences. Businesses and individuals should ensure they are aware of the eligibility criteria and accurately represent their expenses to avoid any fraudulent activities.

As a business owner, you understand the importance of making wise decisions, but when it comes to defending yourself against allegations of PPP fraud, the stakes are higher than ever. The Department of Justice (DOJ) is casting a wide net in its efforts to root out abuse of the Paycheck Protection Program (PPP) and investigate businesses that allegedly obtained fraudulent funds through the federal loan program. If you find yourself targeted by a PPP fraud audit or investigation, you could face civil penalties and potential criminal prosecution by the federal government. Even if you believe you have complied with the terms of the federal loan program, the wide scope of the DOJ’s PPP fraud probe could end up entangling you in a federal criminal investigation, which could wreak havoc on your reputation.

The consequences of PPP fraud charges can change the course of your entire life. Federal statutes the DOJ is invoking to file charges in PPP loan cases are broadly defined and come with harsh criminal penalties, possibly including decades in prison and upwards of $1,000,000 in fines. The federal government has shown that it will take advantage of every opportunity to make an example of those suspected of committing PPP loan fraud. To avoid criminal prosecution, you will need a steadfast criminal defense lawyer on your side.

That’s why it is critical to seek qualified legal counsel as soon as you become aware of a PPP fraud investigation or audit involving you or your business. Timing is critical, but keep in mind that your choice of legal counsel can make or break your case. Be sure to do your research before making any decisions about who will represent you. Ask for recommendations from friends and family members who experienced similar problems, read client testimonials and look up the firm’s past results in cases that are comparable to yours. Many lawyers specialize in a particular area of the law and you want to make sure your attorney has relevant legal experience and a record of success achieving favorable outcomes for clients.

Once you have narrowed down your choices, it is a good idea to meet with a few of the attorneys on your list before choosing who will represent you in your federal PPP fraud case. Many firms, ours included, offer prospective clients a free initial consultation, which gives you the opportunity to decide which attorney you are most comfortable with. You may not get much in-depth legal advice during an initial consultation, but you can get some valuable information about the attorney’s background, experience, and strategies they would use for your case.

Don’t take the risk of facing PPP fraud charges alone. Contact our experienced federal PPP fraud defense attorneys today to get the help you need. We understand the gravity of your situation and we are here to guide you through the legal process, protect your rights, and fight for the best possible outcome for you and your business. Don’t hesitate, act now to ensure that you have the best representation possible.