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When you’re facing a federal issue, you need an attorney whose going to be available 24/7 to help you get the results and outcome you need. The value of working with the Spodek Law Group is that we treat each and every client like a member of our family.

What are the Red Flags for PPP Loan Fraud?

Federal Authorities Investigating Potential PPP Loan Fraud

Federal authorities are looking at companies and individuals who they suspect have defrauded the PPP. Below are some red flags which could trigger a PPP investigation.

The federal Paycheck Protection Program comes with a lot of rules. The SBA acknowledged that the PPP loan application had a lot of compliance burdens, and the fact there was limited information made initially available to applicants. The SBA offered a grace period during which companies could return PPP loans they received improperly without any penalty. This grace period has expired. The SBA-OIG, the DOJ, and other federal agencies are now targeting companies suspected of engaging in PPP loan fraud.

If your company received a PPP loan, it’s possible you might be at risk if you made a mistake. You could be at risk, as a company owner, board member, executive, etc. There are many pitfalls. Executing an effective and timely defense is crucial. All companies who received PPP loans are advised to conduct an internal PPP compliance investigation to make sure there are no pitfalls. At Spodek Law Group, we can help with PPP loan fraud audits, investigations, and criminal defense.

Top 10 Reasons For PPP Loan Fraud

1. No Documentation To Support Your Company’s PPP Loan Application Representations

Companies that make representations during the PPP loan application process have to be able to support those representations. Under the terms of the PPP program, companies have to be able to show:

George FernandezGeorge Fernandez
14:16 30 Apr 24
Excellent 10 out of 10, Helped resolve my case. Jeremy explained everything and made everything easy to understand.
21:33 24 Apr 24
If you are looking for a lawyer that listens, is aggressive where needed, and holds his word above all else, Todd is the best pick. I had hired multiple attorneys prior to hiring the Spodek Group for a white collar case. The first thing that stood out to me was the cost, as anyone going through the process and dealing with the system, money was tight at that time - especially after hiring and firing multiple lawyers. The cost was not as high as others which was definitely a plus. Todd's intake process was also unlike other attorneys. He took the time to actually listen. He cared. He was trying to put himself in my shoes while I was explaining the situation to him and he really took the time to understand the whole situation. Other lawyers will give you 15 mins and send you a retainer agreement. Not Todd, I think he spent almost two hours with me as I was explaining everything.Not only was he great during the onboarding process, he was supportive and very informative through the entire plea process and eventually sentencing. After hiring him, I asked if I should hire a prison consultant, he told me to save my money as he would do everything they would. He was right and held up to his word. Later on I would hear from others that went with the prison consultants that they were a waste of money - I am glad I listened to Todd!When it came time for sentencing, two days prior to sentencing, the prosecutor tried increasing my proposed prison time by almost double - apparently a normal move. Todd and his team worked with me non-stop through the weekend prior to sentencing to ensure that I was not given additional prison time. Again, he took the time to listen and came up with a strategy to explain the case with great detail.Unfortunately, I did plead guilty as that was my best option. Todd and his whole team wrote up nearly 300 pages of a summary of what happened and why I should not be given prison time. If I breakdown the amount I spent with Todd versus the amount of work that I saw being done, I am shocked I was not charged four times as much. The other benefit was, a lot of criminal defense lawyers were just a single attorney with a paralegal or two. Todd had a team of people that I dealt with (5-7 people that I interacted with), but he was ALWAYS accessible. It would never take him more than an hour to reply unless he was in court.I was sentenced to prison and I was emotionally distraught. Todd and his team did whatever they could even after sentencing to make sure I was alright. He personally stayed in touch with my family to ensure I was doing alright and offered support to them. Most lawyers would consider the job complete at sentencing, not Todd.After prison, Todd still spent time with me to make sure I was on the right track and avoiding any potential risks in the future. He has also been giving advice on how to navigate probation etc and has not been looking at the clock for billing.Although I wish I had never been arrested in the first place, I am glad I had Todd and his team in my corner. Without them I likely would have had to spend a lot more time in prison than I did.Thank you, Todd, and the entire Spodek Law team, for helping turn what was a nightmare into a manageable situation!
Yelva Saint-PreuxYelva Saint-Preux
19:26 19 Apr 24
I am immensely grateful to the entire team at Spodek Law Group for their unwavering dedication and exceptional expertise throughout my case. From our initial consultation to the final resolution, their professionalism and tireless advocacy made all the difference. Their strategic approach and attention to detail instilled confidence in me every step of the way.Thanks to their hard work and commitment, we achieved a truly favorable outcome that exceeded my expectations. Not only did they navigate the complexities of my case with precision, but they also provided invaluable support and guidance during what was undoubtedly a challenging time. I cannot recommend Spodek Law Group highly enough, especially attorneys Todd Spodek and Claire Banks; they are beacons of excellence in the legal profession.YSP.
Katherine SunKatherine Sun
18:08 18 Apr 24
my lawyer is Alex Zhik. Efficient, patient and professional
Nun yaNun ya
17:48 18 Apr 24
Todd, Ralph and Alex are amazing. Helped my husband get from a double digit number with multiple charges to a single digit, by the time I blink he will be out. They very professional and help with all your needs. They dealt with my anxiety and worry very well and they understand that your family member needs to get home as soon as possible.
Keisha ParrisKeisha Parris
20:45 15 Mar 24
Believe every single review here about Alex Z!! From our initial consultation, it was evident that Alex possessed a profound understanding of criminal law and a fierce dedication to his clients rights. Throughout the entirety of my case, Alex exhibited unparalleled professionalism and unwavering commitment. What sets Alex apart is not only his legal expertise but also his genuine compassion for his clients. He took the time to thoroughly explain my case, alleviating any concerns I had along the way. His exact words were “I’m not worried about it”. His unwavering support and guidance were invaluable throughout the entire process. I am immensely grateful for Alex's exceptional legal representation and wholeheartedly recommend his services to anyone in need of a skilled criminal defense attorney. Alex Z is not just a lawyer; he is a beacon of hope for those navigating the complexities of the legal system. If you find yourself in need of a dedicated and competent legal advocate, look no further than Alex Z.
Taïko BeautyTaïko Beauty
16:26 15 Mar 24
I don’t know where to start, I can write a novel about this firm, but one thing I will say is that having my best interest was their main priority since the beginning of my case which was back in Winter 2019. Miss Claire Banks, one of the best Attorneys in the firm represented me very well and was very professional, respectful, and truthful. Not once did she leave me in the dark, in fact she presented all options and routes that could possibly be considered for my case and she reinsured me that no matter what I decided to do, her and the team will have my back and that’s exactly what happened. Not only will I be liberated from this case, also, I will enjoy my freedom and continue to be a mother to my first born son and will have no restrictions with accomplishing my goals in life. Now that’s what I call victory!! I thank the Lord, My mother, Claire, and the Spodek team for standing by me and fighting with me. Words can’t describe how grateful I am to have the opportunity to work with this team. I’m very satisfied, very pleased with their performance, their hard work, and their diligence.Thank you team!
K MarK Mar
01:37 25 Jan 24
I recently had Spodek Law Group represent me for a legal matter in NYC and I am thoroughly impressed with their services.Alex Zhik secured the best possible outcome for my case.It was a seamless journey from the initial consultation to the resolution of my legal matter. From the moment I spoke to Todd about my case, his enthusiasm to help was evident, setting a positive tone for the entire experience. The efficiency and professionalism displayed by the team is commendable.A particularly noteworthy aspect of their service is their user-friendly portal to upload your documents/evidence. This not only simplified the process, but showcases their commitment to streamline the client experience.Lastly, in an industry where legal fees can often be a concern, I found their pricing to be very reasonable, making needing legal assistance feel accessible and stress-free.I am grateful for their support and wouldn't hesitate to turn to them again in the future.
  • They are applying for PPP because there was uncertainty due to economic conditions, which require the loan to support ongoing operations.
  • There are fewer than 500 employees, qualify as a small business concern, or meet one of the other PPP eligibility standards
  • The owners of the business are eligible to participate in SBA programs such as PPP.

During a PPP loan audit or investigations, agencies will assess the loan recipient’s eligibility, in addition they’ll look for whether companies have documentation on hand to justify the representations they made on their loan application.

2. Multiple PPP Loan Applications Submitted to Many Lenders

Under the CARES Act, companies can only get 1 PPP loan from one lender. Getting more than one PPP loan, or stacking PPP loans, is prohibited. Companies which applied with multiple lenders could face allegations for attempting to stack multiple PPP loans. Even if only one PPP loan was obtained, attempting to get more than one loan can lead to criminal charges being filed. Individuals and companies charged with attempts can face the same penalties that apply – as if it was a successful completion of a criminal offense.

3. No Adoption of PPP Compliance Policies

The CARES Act established requirements for how companies can use PPP loan funds. Strictly, once you get PPP funds, companies must adopt policies and procedures to ensure continuous PPP compliance. It’s important that companies be only allowed to use the funds they received from PPP for specific authorized purposes. These purposes include payroll and related expense, payment of insurance premiums, payment of utility bills, and other things related to the business. In order to account for the disbursements from the PPP loan, companies should deposit the loan into a specific account – and not commingle their PPP loan funds with other company assets.

4. No Adequate Documentation of PPP Loan Expenditures

When you use your PPP loan funds, companies should document their expenditures in order to show they have used their PPP loan for authorized purposes only. In many cases, this means more than recording the transaction in Quickbooks. It means having documentation. It’s important that the use of PPP loan funds was not for personal expenses. Under the terms of the PPP program, utilizing funds for personal expenses was prohibited. The DOJ has already initiated federal cases against individuals who misused PPP funds for personal expenses.

5. Inadequate Documentation Regarding Loan Forgiveness Certification

Another aspect of the PPP program is that it is forgivable, assuming it was used for the right reasons. When seeking forgiveness, companies have to provide documentation, and certify as to the accuracy of the documentation. Inadequate or questionable documentation can be a red flag.

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