When the PPP launched in April 2020, there were many applications. Millions of businesses applied for loans. The initial PPP $349 billion allocation of funds was exhausted almost instantly. While many of the applications were legitimate, it was clear that many banks issued millions of dollars of loans due to false applications.
If you recently realized that information in your company’s PPP loan application was false, or if you are being investigated for filing a fake PPP application, then what should you do? At this point, the main thing you can do is speak to an experienced federal criminal defense attorney. The Paycheck Protection Program Flexibility Act of 2020, which was enacted on June 5, 2020, relaxed some of the standards for PPP loan forgiveness.
Employees are turning in employers for PPP loan fraud
For company owners and executes who are concerned about the accuracy of their PPP loan applications, one thing they can’t do is ignore this issue. The SBA is encouraging employees to whistleblow and come forward with information about PPP application fraud. By filing whistleblower claims, employees can get 30% of the amount the government recovers. This has created a significant incentive for individuals to report instances of PPP fraud.
What constitutes PPP loan application fraud?
Employees can file whistleblower claims based on a wide array of allegations. Some examples of fraud, and false, statements which can lead to prosecution include:
How is the federal government uncovering false PPP loan applications
In addition to whistleblower claims, one of the main ways the government is uncovering PPP application fraud is the SBA audit program. The SBA is looking at the applications of all companies which got PPP loans of $2 million or more, and is auditing the applications of recipients of smaller PPP loans as well. The SBA is conducting these audits when the company submits their request for loan forgiveness. If the SBA determines that a loan recipient’s application was false, not only can it deny the forgiveness of the application – it can also refer the borrower of the PPP loan for a civil or criminal fraud investigation.
What agencies are investigating PPP application fraud?
There are many federal agencies which are investigating PPP loan application fraud. The investigations are being triggered either by whistleblower claims, SBA audits, or information obtained from PPP lenders. Investigations conducted by each of these agencies can lead to federal charges, and the penalties can be severe. Below is a list of the agencies that are investigating PPP loan application fraud:
There are many possible charges and penalties
Companies, and individuals, including company owners/executives – accused of submitting fake PPP applications can face a number of federal charges. Federal prosecutors are using a variety of statutes to prosecute companies and individuals that obtained/tried to obtain, funds under the PPP by submitting fake applications. Below is a list of statutes that could be used against applicants:
What will happen if you’re charged with criminal fraud
Anyone who is charged with criminal fraud as a result of submitting false PPP loan applications will be subject to scrutiny, and potential prosecution. Facing criminal charges can be very different from a state level proceeding. At Spodek Law Group, our team of lawyers has experience handling some of the toughest federal cases nationwide.
Are you at risk for federal criminal prosecution
There are many mistakes you have to avoid because they can result in potential criminal charges being filed against you.
What Should I Do if I Realize My PPP Application was False?
If your PPP application potentially contained fake information, or false information – it’s critical you speak to our PPP loan fraud lawyers immediately. We are here to help you.
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