Criminal Defense Lawyers

How much time can you get for ppp fraud?

How Much Time Can You Get for PPP Fraud?

This helpful was created in 2020 to provide relief for businesses that were struggling due to the COVID-19 pandemic. The PPP program offered forgivable grants/loans to help cover business expenses such as:payroll, rent, utilities and other business expenses. However, some business owners and individuals took advantage of the program and committed fraud to obtain funds they weren‘t supposed to get.

One of the questions we’re being asked is: how much time can you actually get for PPP fraud?

Well, it depends on the circumstances and charges – PPP fraud can potentially lead to decades in prison. Let‘s take a look at some of the factors that determine sentencing for PPP fraud:

Types of Possible PPP Fraud

There are a few ways PPP fraud has occurred:

• Some business owners have been providing fake information on PPP loan applications, such as overstating number of employees, payroll expenses, or falsifying other documents.
• They used PPP funds for unauthorized personal purchases instead of approved business expenses like payroll.
• They lied on the loan forgiveness application about how funds were used in order to have the loan forgiven.
• They applied for multiple PPP loans from different lenders, known as “loan stacking,” which resulted in them getting more than they deserved.
• They created fake businesses, or stole identities, to apply for fraudulent PPP loans.
• They conspired with others to commit PPP fraud.

List of Criminal Charges for PPP Fraud

While the CARES Act itself didn’t contain specific criminal penalties, PPP fraud can lead to many different potential charges under pre-existing federal fraud laws, including:

• Wire fraud (18 USC §1343) – up to 30 years imprisonment
• Bank fraud (18 USC §1344) – up to 30 years imprisonment and $1 million fine
• Making false statements (18 USC §1001) – up to 5 years imprisonment
• Aggravated identity theft (18 USC §1028A) – mandatory 2 years imprisonment
• Money laundering (18 USC §1956) – up to 20 years imprisonment per violation
• Tax evasion (26 USC §7201) – up to 5 years imprisonment
• Conspiracy to defraud the government (18 USC §371) – up to 5 years imprisonment

Sentencing Factors in PPP Fraud Cases

When it comes to determining the final sentence, judges are looking at a variety of factors, such as:

Federal Sentencing Guidelines – These guidelines look at the amount of monetary loss, and other factors, in order to provide a recommended sentencing range. If fraud was done with larger loan amounts then this means it’s likely that there’s going to be a longer sentencing charge.

Criminal History – Repeat offenders will usually get harsher sentences. Defendants with a criminal record will usually get more more prison time than a first-time offender.

Acceptance of Responsibility – Defendants who plead guilty, and express remorse, can receive lighter sentences.

Restitution – Judges could potentially consider a defendant’s repayment of stolen funds as a mitigating factor.

Type of Fraud – Certain PPP fraud schemes are viewed as more harmful, like creating fake businesses, or stealing identities.

Role in Offense – Defendants who were organizers, or leaders, of criminal schemes get longer sentences than lower-level accomplices.

Avoiding Jail Time for PPP Fraud

For anyone who is facing PPP fraud charges, avoiding prison means having an experienced federal criminal defense lawyer on your side. Strategies that our federal criminal defense lawyer will take, may include:

Plea negotiations – Our criminal defense attorneys might be able to get charges dropped, or reduced, or they might be able to secure a plea deal with lighter sentencing recommendations.

Sentencing memos – Our criminal defense lawyers can submit documents that outline mitigating factors which warrant a lower sentence.

Appealing sentence – After sentencing, our criminal defense attorneys can file appeals arguing your sentence was improperly calculated or excessive.

Cooperating with prosecutors – In some cases, defendants can get a lighter sentence by providing substantial assistance with investigating other PPP fraud cases.

Common PPP Fraud Scenarios

Lying on Loan Applications.

This is one of the most obvious forms of PPP fraud. Applicants who are accused of this type of PPP Fraud typically lied about:

• Number of employees
• Payroll costs
• Revenue
• Existence of the business itself!

If you made any false statements to obtain a PPP loan, this is fraud. Our federal defense attorneys have experience dealing with all types of loan fraud lies.

Using Funds Improperly

Even if you qualified for the PPP program, misusing PPP money is fraud. It was meant for very specific costs like payroll, mortgage interest, rent and utilities. If you spent it on personal luxuries, like buying a new car, that’s a no-no.

Identity Theft

Some people stole identities in order to apply for multiple PPP loans. They used fake, or stolen, details to secure PPP loans. This is considered wire fraud, and identity theft, in addition to PPP fraud. Our federal defense lawyers have experience with these complex cases.

Inflating Costs

Some people inflated their businesses’ numbers by inflating legit business costs. This is fraud. 

Penalties are Harsh For PPP Loan Fraud

PPP fraud is a federal crime. Charges can include:

• Bank fraud
• Wire fraud
• Money laundering
• Making false statements

Penalties for PPP loan fraud are severe – such as up to 30 years in prison, plus fines, and in addition having to repay the loan! Many states are also bringing charges. Bottom line, it’s not worth the risk. But if you’re already facing charges, you need an experienced PPP fraud lawyer.

Common Defenses for PPP Fraud

There are valid defenses our attorneys use to defend clients, like:

Lack of Criminal Intent

For fraud charges, prosecutors HAVE TO prove you willfully broke the rules. If you genuinely misunderstood the PPP guidelines, you may have potential defenses available to you. It significantly reduces the liabilities you have. For example, if when you applied the rules were unclear on whether you qualified – this is a potential defense. Or you thought you could use the funds a certain way. No fraudulent intent, no crime.

Entrapment

In rare cases, federal agents could have induced or entrapped you into committing PPP fraud. If so, we may get charges dismissed on entrapment grounds.

Prosecutorial Misconduct

Prosecutors are not allowed to withhold exculpatory evidence or break other rules. Spodek Law Grou’s attorneys will fight any misconduct issues aggressively.

Advice of Counsel

Did an accountant, lawyer or someone else give you advice you to proceed a certain way with your PPP loan? You probably have a defense if you relied on their advice. The key is building the strongest possible defense from day one is having plausible deniability, and defenses. Our PPP fraud lawyers have relationships with prosecutors, and know how to win cases; we know their strategies.

What to Do If You’re Under Investigation

First – don’t panic and make rash decisions. This only makes things worse. Truly. Yes, PPP fraud is extremely serious. But, our lawyers have gotten charges dropped or reduced in many complex cases.

Do NOT Speak to Investigators

As soon as you become aware of an investigation, stop talking to anyone – family, friends, or government officials! Anything you say can, and will, be used against you. You should forward all questions to your PPP fraud lawyer. Our criminal defense attorneys will deal with investigators directly to protect your rights.

Gather All Documentation

In order to get you legal help, we’ll need to see your PPP loan application, supporting documents, bank statements – everything related to the PPP loan you took. All documents you submitted must be evaluated. It’s important that you start putting together a timeline of events too, and share this with our attorneys so we can advise you. The more information we have, the stronger our defense for you will be.

Be Proactive

The worst thing you can do is stick your head in the sand and ignore communication from the government. This gives gives prosecutors more time to build their case. As soon as you suspect trouble, contact a top PPP fraud lawyer. 

Our Firm’s Approach

At Spodek Law Group, we’ve handled many complex federal cases. We understand the implications of a PPP fraud conviction – it means your future is at risk. This is why we fight tooth and nail for our clients. Our goal is getting charges reduced, or dismissed entirely. 

Potential Civil Liabilities

Even if you are able to avoid criminal charges, PPP fraud can open you up to civil lawsuits and penalties, like:

• False Claims Act Violations – The False Claims Act allows the government to sue over fraudulent claims. Penalties are severe – triple damages plus fines.
• Qui Tam Whistleblower Suits – Employees, competitors, or anyone else can file a whistleblower suits pertaining PPP fraud under the False Claims Act. If successful, they get a cut of recoveries.

Get Help From a Top PPP Fraud Lawyer

Facing PPP fraud charges is terrifying. This impacts the rest of your life. The stakes couldn’t be higher. But you don’t have to go it alone. The elite PPP fraud lawyers at Spodek Law Group have successfully defended countless clients in complex federal cases.