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Sacramento PPP Loan Fraud Lawyers

The Dark Side of PPP Loans: Fraud and Federal Investigations

As the coronavirus pandemic continues to ravage the economy, many businesses are scrambling to secure financial assistance to keep their doors open. The Paycheck Protection Program (PPP) was created as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act to provide a lifeline to struggling companies. However, as the funds are distributed, a dark side has emerged – fraud.

If your business or organization is under investigation or audit for PPP loan fraud, it is crucial to retain a skilled federal criminal defense attorney to navigate the complex legal landscape and mitigate the risk of facing federal criminal prosecution. The government and private banks are working together to identify irregularities and fraud in the application process, and any individual or business found guilty of illegally receiving PPP funds could be facing severe legal repercussions.

In addition to PPP loan fraud, federal and state agencies are also investigating other forms of fraud, such as loan stacking, using PPP funds for unauthorized use, and fraudulent loan forgiveness certification. And if your company is under investigation, it’s important to be mindful of the potential federal charges that could be leveled against you, such as False Statements, Commerce Fraud, Conspiracy to Make False Statements, Making a False Statement, and Wire Fraud.

At our law firm, we specialize in federal criminal defense, and our attorneys have extensive experience representing clients in PPP loan fraud cases. We understand the gravity of the situation and will work tirelessly to protect your rights and interests. Our attorneys are available 24/7 to provide a FREE CONSULTATION and assess your case.

Don’t wait until it’s too late – early intervention by a knowledgeable SBA fraud defense lawyer is key to mounting a proper defense. Contact us today and let us guide you through this difficult time. We have the expertise, resources, and determination to fight for the best possible outcome for you.

What is PPP Loan Fraud?

In summary, PPP loan fraud occurs when a person or business submits false information on an application for a loan under the federal Paycheck Protection Program (PPP). This can include misrepresenting the number of employees, misclassifying employees as independent contractors, falsely claiming eligibility as a small business, and misrepresenting payroll costs to increase the loan amount. The United States Department of Justice is actively investigating potential PPP loan fraud and other CARES Act violations in an effort to recover money that could have been fraudulently acquired from COVID-19 relief programs. If you are under investigation for PPP loan fraud, it is important to seek the guidance of an experienced criminal defense attorney to help you resolve the case and protect your rights.

The Rush to Provide Aid and the Consequences

When the COVID-19 pandemic hit, small businesses across the country were struggling to stay afloat. In an effort to provide much-needed financial support, the government rolled out the Paycheck Protection Program (PPP) to help these businesses keep their doors open and retain employees. However, as the PPP loan application process was rushed and under intense pressure to get money into the hands of business owners, little auditing was completed prior to issuing funds. This has led to a flood of federal probes and arrests where funds were misused or issued based on false and fraudulent representations.

One way PPP fraud has occurred is through individuals submitting fake or multiple loan applications in the names of newly created businesses, falsely claiming to have numerous employees earning wages. These individuals then use the PPP funds for personal or other non-qualifying expenses, resulting in federal prosecutors treating the entire PPP application as fraud. This can lead to charges of wire fraud and bank fraud, both of which carry a maximum penalty of 30 years in prison. Money laundering charges, with a maximum penalty of 20 years in prison, are also frequently brought against defendants in these cases.

Even for legitimate companies receiving PPP aid, there has been federal scrutiny and threats of criminal prosecution. These cases typically involve businesses that do not actually require assistance, but have made a material misrepresentation in their PPP loan application. This highlights the importance of businesses seeking legal counsel before applying for PPP funds to ensure they are in compliance with all program rules and regulations.

The threat of criminal prosecution and the need for legal representation underscores the gravity of the situation and the dire need for businesses to be vigilant and honest when applying for PPP funds, as the stakes are high and the consequences severe.

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