Oklahoma City PPP and EIDL Loan Fraud Lawyers
As the nation grapples with the ongoing economic fallout of the COVID-19 pandemic, small businesses have been hit particularly hard. In an effort to provide a lifeline to these struggling companies, the federal government created the Paycheck Protection Program (PPP), which offered forgivable loans to help businesses keep their doors open and their employees on the payroll. Unfortunately, with any large-scale government program, there is always the potential for fraud. Our federal criminal defense attorneys have seen federal prosecutors aggressively bringing criminal charges for a wide variety of conduct related to the PPP.
One type of PPP fraud that has been particularly egregious is PPP Application Fraud. The CARES Act, which created the PPP, required businesses that applied for a loan to provide accurate and truthful information on the application. This included information about the number of employees working for the company, accurate employee payroll numbers, and salary and revenue numbers for the company and its employees. Providing false information as part of a loan application could result in an investigation or criminal charges.
Another area of PPP fraud that has caught the attention of federal prosecutors is Fraudulent Use of PPP Loan Funds. The PPP provided limits on the use of the funds from the PPP loans, with the funds only supposed to be used for specific expenses, such as paying for interest and rent under current leases, paying a company’s payroll expenses, paying insurance premiums, and paying for utility costs. If the funds were used for personal expenses or luxury items rather than legitimate business expenses, those expenditures could attract the attention of federal prosecutors.
Yet another area of PPP fraud that has come to light is 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. However, 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.
Finally, Obtaining Multiple PPP Loans From Different Lenders is another area where some companies have taken advantage of the program. 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.
It is important to note that the above-mentioned types of PPP fraud are only a few examples and the federal government is actively investigating and prosecuting all forms of PPP fraud. If you or your business are under investigation or have been charged with PPP fraud, it is crucial that you seek the advice of a criminal defense attorney immediately. The stakes are high, and the consequences of a conviction can be severe.
As our experienced federal criminal defense attorneys know all too well, federal prosecutors have been zealously pursuing criminal charges for a wide range of conduct related to the Paycheck Protection Program (PPP). From application fraud to fraudulent use of loan funds, the government is leaving no stone unturned in its efforts to root out PPP fraud.
One of the most prevalent forms of PPP fraud is application fraud. The CARES Act, which established the PPP, required businesses to provide accurate and truthful information on their loan applications. Failure to do so could result in criminal charges. This is particularly true for businesses that provided false information about the number of employees they had, overstated employee payroll numbers, or falsely categorized employees as independent contractors in order to qualify for the loan. Additionally, providing false salary and revenue numbers for the company or its employees, or using someone else’s information to apply for a loan, could also result in criminal charges.
Another area of concern for the government is fraudulent use of PPP loan funds. The CARES Act placed strict limits on how PPP funds could be used, such as paying for rent, payroll expenses, insurance premiums, and utility costs. Using the funds for other purposes, or using them for personal expenses or luxury items, could result in the funds not being eligible for loan forgiveness and attract the attention of federal prosecutors.
Fraud in the loan forgiveness certification process is yet another area of concern. To be eligible for loan forgiveness, borrowers had to certify that the loan was needed due to economic uncertainty related to the pandemic, that the funds were used for intended purposes such as retaining employees or paying rent, leases, or utility bills, and that the documents and information submitted were accurate and truthful. Providing false information in connection with a forgiveness application, or submitting fraudulent or inaccurate documents, could lead to criminal charges.
Finally, obtaining multiple PPP loans from different lenders is another area of concern. While the PPP allowed for up to two loans for some companies, businesses 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. Any business that borrowed from more than one lender should contact a criminal defense attorney immediately.