As the COVID-19 pandemic continues to ravage the economy, federal prosecutors have been bringing criminal charges against those who have allegedly committed fraud in connection with the Paycheck Protection Program (PPP). Our experienced federal criminal defense attorneys have seen a wide variety of conduct being targeted in these investigations and indictments.

One of the most common types of alleged conduct is PPP Application Fraud. The CARES Act, which created the PPP, required businesses to provide accurate and truthful information on their loan applications. Failure to do so could result in criminal charges. The government is particularly interested in false information related to the number of employees a company has, accurate payroll numbers, the classification of employees as independent contractors, and salary and revenue numbers for the company and its employees. Additionally, using someone else’s information to apply for a loan is also a serious crime that could attract the attention of federal prosecutors.

Another area of focus for prosecutors is Fraudulent Use of PPP Loan Funds. The CARES Act placed restrictions on how PPP funds could be used, with the funds only being eligible for loan forgiveness if they were used for specific expenses such as payroll, rent, and utilities. Any use of the funds for personal expenses or luxury items could result in criminal charges.

Fraud in the Loan Forgiveness Certification Process is another area of concern for the government. Borrowers who seek loan forgiveness must comply with the terms of the program and provide accurate and truthful information. Providing false information or submitting fraudulent documents in connection with a forgiveness application could lead to criminal charges.

Finally, Obtaining Multiple PPP Loans From Different Lenders is a crime that is being heavily prosecuted. The PPP allowed for up to two loans for some companies, but companies that applied for more than two loans with multiple lenders could be investigated by the government and criminally charged.

In short, the government is taking PPP loan fraud very seriously, and businesses that borrowed from the program should be aware of the potential criminal consequences if they did not comply with the program’s requirements. If you have any questions or concerns, it is essential to contact a criminal defense attorney immediately.

The Paycheck Protection Program (PPP) loan fraud is a serious issue that has plagued small businesses during the COVID-19 pandemic. As part of the CARES Act, eligible small businesses have been able to obtain up to $10 million to cover essential expenses such as payroll, mortgages, rent, and utilities for eight weeks. The government has also promised to forgive the debt if the money is used for these “qualified expenses.” However, some unscrupulous individuals have taken advantage of this opportunity by fraudulently obtaining funds through false pretenses.

The Small Business Administration (SBA) has made it clear that only businesses affected by COVID-19 and with fewer than 500 full-time employees are eligible for CARES relief. Cheating the SBA out of this stimulus money is a federal felony and carries potential prison time, fines, and repayment of the loan. The sentence depends on the specific offense, such as making false statements or overvaluing securities. The punishment can range from a $5,000 fine and/or two years in federal prison for a felony to $10,000 and/or five years in prison for embezzlement. Additionally, the defendant will need to pay restitution.

However, there are defenses that can be argued in court. For example, the defendant may argue that they had no intent to defraud or that the SBA made a mistake. For instance, if a business owner accidentally provided false information on their loan application, they are not criminally liable as they had no intent to defraud. Similarly, if the SBA made an error, the defendant can use their records such as email communications, voicemails, bank statements, accounting notes, receipts, and bills to prove their innocence.

Unfortunately, in most cases, federal criminal records are unsealable. Furthermore, fraud involving more than $10,000 is an aggravated felony and a crime involving moral turpitude, which can lead to deportation for non-citizens. Therefore, it is crucial for non-citizens facing criminal charges to consult with legal counsel as soon as possible to get the charges dismissed or reduced to a non-deportable offense.

In conclusion, PPP loan fraud is a serious issue that has affected small businesses during the COVID-19 pandemic. It is important for business owners to be aware of the eligibility criteria and to keep accurate records to avoid any potential fraud accusations. Furthermore, those facing PPP loan fraud charges should seek legal counsel as soon as possible to protect their rights and interests.

The Paycheck Protection Program (PPP) was created as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was signed into law on March 27, 2020. The PPP offered small businesses up to $2 million in loans, with no interest or principal due for the first 12 months, to cover payroll, rent, utilities and other essential expenses. These loans were guaranteed by the U.S. Small Business Administration (SBA) and were intended to provide much-needed relief to businesses affected by the COVID-19 pandemic.

However, as with any federal program, there are those who seek to take advantage of the system and fraudulently obtain funding. PPP loan fraud is a federal crime under the Small Business Act, and it carries serious consequences.

Some of the most common examples of PPP loan fraud include: misrepresenting the number of employees a business has in order to qualify for funding, inflating payroll costs in order to receive more funding, and falsely claiming that a business has been affected by the COVID-19 pandemic in order to be eligible for PPP loans.

The SBA’s Office of Inspector General has issued several reports detailing widespread fraud and abuse in the PPP loan program. As a result, many cases of suspected fraud have been referred to the Department of Justice for criminal prosecution.

Fraud involving more than $10,000 is an aggravated felony, and it is also considered a crime involving moral turpitude. This means that non-citizens convicted of CARES Act fraud are vulnerable to deportation.

If you have been accused of PPP loan fraud, it is important to consult with a criminal defense attorney as soon as possible. A skilled attorney may be able to get the charges dismissed or reduced to a non-deportable offense. They may also be able to argue that you had no intent to defraud or that the SBA made a mistake.

In summary, PPP loan fraud is a federal crime that carries serious consequences. Business owners should be aware of the eligibility criteria and should not misrepresent facts to the federal government in order to obtain funding. Those who have been accused of PPP loan fraud should seek legal counsel immediately.