Oregon PPP and EIDL Loan Fraud Lawyers
The Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) program, were created by the federal government to provide emergency financial assistance to small businesses impacted by the COVID-19 pandemic. However, like any government program involving large amounts of money, these programs have been exploited by fraudsters looking to take advantage.
If you operate a small business in Oregon and have applied for or received PPP or EIDL funds, it’s important to understand the rules and potential legal risks. This article provides an overview of PPP and EIDL fraud issues and how an experienced lawyer can help if your business is being investigated.
What is PPP and EIDL Fraud?
PPP and EIDL fraud typically involves falsifying information on loan applications to receive funds the business is not actually eligible for. Some common schemes include:
- Overstating number of employees or payroll expenses to get larger PPP loans
- Using PPP funds for non-eligible expenses like personal purchases
- Applying for multiple PPP loans through different lenders
- Lying about economic hardship from COVID-19 to qualify for EIDL grants and loans
Prosecutors are aggressively going after COVID relief fraud cases across the country. Charges can include wire fraud, money laundering, false statements, or aggravated identity theft. Penalties can be severe depending on the amount of money involved.
Spotting Potential PPP or EIDL Fraud
Small business owners who received COVID relief funds should be on the lookout for signs of potential fraud. Here are some red flags:
- Being contacted by SBA Office of Inspector General for questioning
- Receiving loan amounts that seem excessive compared to your business size and expenses
- Funds deposited in personal rather than business accounts
- Bank inquiries about suspicious transactions
- Requests for paperwork you don’t recognize submitting
If you notice any suspicious activity related to PPP or EIDL funds, take action quickly to get ahead of any potential legal issues.
Common PPP and EIDL Fraud Defenses
For small business owners facing allegations of COVID relief fraud, having an experienced legal defense is crucial. A knowledgeable lawyer can evaluate the evidence and identify potential defenses such as:
- Lack of intent – The business owner did not deliberately falsify information or misuse funds. Mistakes due to confusion over complex program rules may not rise to the level of criminal fraud.
- Loan forgiveness – PPP loans are forgivable if the funds were used for eligible expenses like payroll and rent. The business may be able to avoid charges by demonstrating proper use of funds.
- Return of funds – Voluntarily returning any improperly used PPP or EIDL money can be a mitigating factor that helps avoid criminal prosecution.
- Statute of limitations – There are time limits on how long after an alleged fraud the government can press charges. An experienced legal team knows how to assert these protections.
Finding an Oregon PPP or EIDL Fraud Lawyer
If your small business is being investigated for potential COVID relief fraud, time is of the essence in engaging legal counsel. Look for a law firm or attorney with specific experience handling federal white collar criminal cases in Oregon.
Key credentials to seek out include:
- Knowledge of federal statutes related to wire fraud, money laundering, false statements, etc.
- Experience constructing defenses for complex financial fraud allegations
- Relationships with local federal prosecutors and investigators
- Past success getting fraud cases dismissed pre-charge or securing favorable plea deals
Law Firm X is one leading legal team in Oregon with extensive experience defending small businesses in PPP and EIDL fraud investigations and allegations. Their attorneys offer free case consultations to evaluate defense options and build an aggressive strategy around asserting applicable protections.
What to Do if You Suspect PPP or EIDL Fraud
If you have reason to believe a business or individual has engaged in fraudulent activity related to COVID relief programs, you can report it to the proper authorities:
- SBA OIG Hotline – The SBA Office of Inspector General operates a hotline to receive tips on potential PPP or EIDL fraud. Reports can be made by phone, email or online form. Complaints are confidential.
- DOJ National Center for Disaster Fraud – The NCDF takes tips nationwide on COVID-19 relief scams and other disaster fraud. Reports can be made by phone or online form.
- IRS Whistleblower Office – You may be eligible for a reward of up to 30% of recovered funds for an accepted IRS whistleblower submission about tax fraud related to COVID relief programs.
When reporting suspected PPP or EIDL fraud, provide as much detail as possible including names, dates, application numbers, amount of funds, and the nature of the alleged scam. Although you can make an anonymous report, identifying yourself allows investigators to follow up for additional information.
COVID Relief Fraud Trends in Oregon
Oregon has seen numerous PPP and EIDL fraud cases prosecuted over the past two years. Some notable examples:
- The DOJ charged two Portland residents with fraudulently obtaining over $1.1 million in PPP loans and using the money to buy luxury vehicles and other personal purchases.
- Federal prosecutors secured a guilty plea from a Eugene man who admitted submitting fraudulent loan applications seeking over $350,000 in PPP and EIDL funds.
- An Oregon construction CEO pleaded guilty to defrauding the SBA out of $7 million in COVID relief funds and spending the money on personal expenses.
- A Beaverton tax preparer was sentenced to over three years in prison for wire fraud related to falsified PPP loan applications seeking $1.1 million.
These cases highlight how seriously Oregon authorities take COVID relief fraud. Businesses and individuals should be very cautious in applying for or using PPP and EIDL funds to avoid potential criminal prosecution.
Protecting Your Oregon Small Business
For small business owners who obtained PPP loans or EIDL funds, the best protection is being able to demonstrate that the money was used properly and as intended under program rules. Steps to take include:
- Maintaining detailed records of how all COVID relief funds were spent, including receipts and documentation.
- Using a separate dedicated bank account for deposit and disbursement of program loan proceeds.
- Consulting an accountant or lawyer about PPP forgiveness and EIDL usage requirements.
- Not ignoring any audit or investigative requests related to COVID relief loans. Seeking qualified legal help immediately if questioned.
- Returning any unused PPP or EIDL funds promptly if your business determines it was overfunded or cannot meet eligibility requirements.
With thoughtful precautions, small businesses can access much-needed federal COVID relief while also protecting against fraud allegations. But if questioned or targeted by investigators, skilled legal counsel is key to effectively asserting your rights. Oregon fraud defense lawyers stand ready to assist local business owners navigate PPP and EIDL fraud issues.
Frequently Asked Questions
What are the main federal charges used in COVID relief fraud prosecutions?
Common charges include wire fraud, bank fraud, false statements, money laundering, and aggravated identity theft. The specific allegations depend on the nature of the alleged scheme.
What government agencies investigate PPP and EIDL fraud cases?
The SBA Office of Inspector General, Department of Justice, FBI, IRS Criminal Investigations, and U.S. Postal Inspection Service all have jurisdiction to probe COVID relief fraud.
Can my business get in trouble for PPP or EIDL fraud even if we already spent the money?
Yes, improper use of program funds or falsifying loan applications constitute fraud even if the money has already been disbursed and spent. You may have to repay the funds.
What should I do if federal agents show up at my business with a search warrant?
Do not obstruct agents executing a warrant, but call an attorney immediately. Invoke your right to remain silent until you can consult with legal counsel about how to respond.
How long do the federal authorities have to bring fraud charges?
For most federal fraud crimes, prosecutors have five years from the date of the offense to bring an indictment. This statute of limitations varies by the specific allegations.
PPP loans and EIDL grants were a lifeline for many Oregon small businesses during COVID-19 shutdowns and slowdowns. But business owners must use proper diligence when applying for and spending program funds to avoid fraud allegations. If questioned or targeted by investigators, experienced legal counsel is essential to protect your interests. Reach out for a free case assessment from a qualified fraud defense attorney serving businesses statewide. With the right preparation and advocacy, you can resolve any COVID relief fraud issues while keeping your company on track for the future.