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PPP Loan Fraud – SBA Loan Fraud – CARES Act Fraud

PPP – Paycheck Protection Program – loan fraud, is a huge issue right now. If you’re investigated and audited, there’s immense political pressure for prosecutors to convict you, or find wrongdoing.

PPP loan fraud is the act of getting money by false pretenses from the CARES act. As of April 2020, businesses can get up to $10 million to cover payroll, mortgages, rent, and utilities expenses. If the money borrowed goes towards these expenses, then the money is forgivable for those “qualified expenses.” Only businesses that were truly impacted by COVID 19, and have less than 50 full time employees are eligible for this funding.

If you cheated the SBA out of money is a felony. It carries fines, prison time, and immediate repayment of the loan. If you’re accused of PPP loan fraud, or if you’re being audited/investigated, we encourage you to contact us for a risk free consultation.

What’s PPP loan fraud?

PPP loan fraud is a determination made due to someone intentionally obtaining, or attempting to obtain, funds through the CARES act which they aren’t entitled to getting at all. Below are examples of PPP loan fraud.

  • Claiming you have less than 500 employees when it’s not true
  • Claiming Coronavirus hurt your business, in order to qualify for the loan
  • Inflating payroll costs to get more money
  • Claiming the loan money is going towards qualified expenses

If investigated, it’s likely the Office of the Special Inspector General for Pandemic Recovery will investigate you. It’s likely the DOJ will also get involved and prosecute charges.

What are penalties for PPP fraud?

PPP loan fraud is a crime. The sentences will depend on the offense you commit.

For example, if you’re convicted of a Felony, it’s likely to result in a fine, and prison time, in addition to restitution.

In order to disprove PPP fraud allegations, the defendant will have to prove there was no intent to defraud and that the SBA has made a mistake.

Lack of intent to defraud is important

Defendants aren’t criminally liable if they accidentally provided false info. Loan applications are very complicated, and at a time of stress – things can get filled out incorrectly. For example if you added an extra 0 to your payroll costs, this is an honest mistake. No crime is committed because you had no intent to defraud the government. If the government tries to go after you, they would have to prove guilt beyond a reasonable doubt. If you say and explain your mistake, the charges might be dropped.

The SBA could make a mistake

Like all agencies, the SBA messes up. During this time of increased stress and activity, errors are likely. It’s critical to keep your records. You must written, email, text, communications, in addition to receipts, bills, and bank statements. They can serve as proof of your innocence if the government audits and investigates you for PPP fraud.

For example, if you apply for PPP loan forgiveness, the government may think you are lying. You will need proper evidence, like receipts, bills, etc, invoices, to prove you spent the PPP funds on necessary expenses that qualify.

Could there be immigration consequences?

Fraud over $10,000 is an aggravated felony. Non-citizens convicted of PPP loan fraud could be deported.

It’s critical if you are facing PPP loan fraud charges, you speak to our attorneys.

PPP Loan Fraud – SBA Loan Fraud – CARES Act Fraud

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Manhattan

85 Broad Street, 30th Floor
New York, NY 10005

Phone

888-977-6335

Queens

35-37 36th St,
Astoria, NY 11106

Phone

888-977-6335

Brooklyn

195 Montague St.
14th Floor,
Brooklyn, NY 11201

Phone

888-977-6335

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