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Dallas PPP and EIDL Loan Fraud Lawyers

The Paycheck Protection Program (PPP) loan fraud is a heinous crime that preys on the most vulnerable during times of crisis. As part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, eligible small businesses were offered up to $10 million to cover essential expenses such as payroll, mortgages, rent, and utilities for eight weeks. The government promised to forgive the debt if the funds were used for these “qualified expenses.” However, some unscrupulous individuals saw this as an opportunity to cheat the Small Business Administration (SBA) and steal much-needed stimulus money.

Make no mistake, PPP loan fraud is a federal crime under the Small Business Act, and the consequences are severe. Those found guilty of making false statements or overvaluing securities could face up to $5,000 in fines and 2 years in federal prison. Embezzlement carries even harsher penalties with fines of up to $10,000 and 5 years in prison. And that’s not all, defendants will also be required to pay restitution.

Defendants facing PPP loan fraud charges can argue that they had no intent to defraud or that the SBA made a mistake. For example, a business owner who accidentally provides false information on their loan application is not criminally liable. Similarly, errors made by the SBA during this time of heightened stress are inevitable, and it’s important for business owners to keep all records such as email communications, voicemails, bank statements, accounting notes, receipts, and bills to prove their innocence.

However, it’s important to note that in most cases, federal criminal records are unsealable, and for non-citizens, fraud involving more than $10,000 is considered an aggravated felony, making them vulnerable to deportation.

The PPP loan program was created to help small businesses affected by COVID-19, and the overwhelming response was evidence of the dire need. Unfortunately, the program was also vulnerable to fraud and abuse, with the SBA’s Office of Inspector General issuing 11 reports detailing widespread fraud and abuse in the PPP loan program. The OIG has referred dozens of cases of suspected fraud to the Department of Justice for criminal prosecution.

In conclusion, PPP loan fraud is a federal crime that carries severe consequences, and it’s essential for small business owners to understand the risks and take all necessary precautions to protect themselves. And for those who think to cheat the system, let this serve as a warning, the government will not tolerate fraud, and you will be held accountable.

Dallas PPP Loan Fraud Lawyers

As the pandemic swept across the nation, small businesses were hit hard. In an effort to keep them afloat, the government introduced the Paycheck Protection Program (PPP) to provide financial aid. However, as with any government program, there are those who seek to exploit it for their own gain. Federal criminal defense attorneys have seen an uptick in criminal charges related to PPP loan fraud. The following are some of the most common types of fraud that the government is investigating:

  1. PPP Application Fraud

The CARES Act required businesses to provide accurate and truthful information on their PPP loan applications. False information could result in criminal charges. The government is particularly interested in cases where businesses:

  • Overstated the number of employees or the amounts that employees would make in order to get more money.
  • Categorized a number of its employees as independent contractors to qualify as eligible applicants.
  • Used someone else’s information to apply for a loan.
  1. Fraudulent Use of the PPP Loan Funds

The PPP provided limits on the use of the funds from the loans. The funds were not supposed to be used for personal expenses or luxury items. If the funds were used for these purposes, the loan would not be eligible for forgiveness. If a business is found to have used the funds for anything other than the intended purposes, federal prosecutors may investigate.

  1. Fraud in the Loan Forgiveness Certification Process

The PPP allowed for the complete forgiveness of many of the loans provided that certain requirements were met. Providing false information in connection with a forgiveness application could lead to criminal charges. Companies that sought forgiveness of the loans had to comply with the terms of the program and prove that they were in fact eligible for forgiveness. Some companies were also required to provide supporting documentation. If a borrower submitted fraudulent or inaccurate documents, attested to statements that were not true, or provided incomplete information, those submissions could attract federal attention.

  1. Obtaining Multiple PPP Loans From Different Lenders

Finally, the PPP allowed for up to two loans for some companies. Companies that applied for more than one loan with multiple lenders for which they were not eligible could be investigated by the government and criminally charged. If a business borrowed from more than one lender, they should contact a criminal defense attorney immediately.

It’s important to note that the government is taking PPP loan fraud very seriously and will not hesitate to bring criminal charges against those who abuse the program. If you have any concerns or questions about your PPP loan, it’s best to consult with a criminal defense attorney. Remember always to be honest and truthful when applying for a loan.

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