Corporate Audits for PPP Loan Fraud Lawyers

Corporate recipients of the Paycheck Protection Program, or PPP loan, often get audited at the time when the company files a loan forgiveness application. The rapid deployment of the PPP loan money opened up the program to applicants that were not the intended beneficiaries. Instead of assuming that the business owner was acting in good faith, many prosecutors took the stance that fraud was being deliberately committed. Any effective defense strategy will challenge this basic assumption as false.

Fraud and PPP Loan Forgiveness

The Department of Justice is also pursuing cases of PPP loan fraud aggressively. Companies seeking to avoid this conflict can take proactive measures to ensure that they remain compliant with the rules governing these loans and the forgiveness programs. Fraud is defined by the participation of the population intended to be excluded from the program. This was never written as a universal benefit even though the pandemic undeniably had a universal impact. Enforcement mechanisms are funded to prevent businesses who took PPP loans from qualifying. This is still a contested area of the law because of the vague nature of the program, its uneven distribution and mishandled administration. The pandemic brought uncertainty and hardship to many businesses of all sizes; it’s an act of bad faith to simply assume the worst in every case.

Corporate Audits Reduce Risk of Prosecution

There are several ways to minimize and reduce the risk of prosecution under this onerous enforcement regime. The first method is to challenge the legal principle in court. This may require adopting a strategic defense posture that is supported by popular opinion. For example, it is widely understood that the resources that went to enforcing the exclusionary aspects of the PPP loan were given to these enforcement activities instead; they may or may not uncover actual cases of fraud. The conversion of the loan program into a universal benefit would instantly neutralize the fraud issue in its entirety, for example.

Fraud Checks and Legal Representation

There are many reasons to consult with a qualified PPP loan fraud attorney. Legal services can assist in the process of clearing the record and proving that the company behaved in good faith. This should be the default assumption, yet this position must often be asserted. Our clients make better decisions when the information available is accurate and useful. This service is part of our complete package. We help businesses facing allegations of PPP loan fraud to mitigate the effects of the charges or overcome them altogether.

DEFENSE TEAM SPOTLIGHT

Todd Spodek

Lead Attorney & Founder

Featured on Netflix's "Inventing Anna," Todd Spodek brings decades of high-stakes criminal defense experience. His aggressive approach has secured dismissals and acquittals in cases others deemed unwinnable.

NY Bar Admitted Multi-State Licensed Federal Courts

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Legal Scenario: What Would You Do?

Scenario

You submitted a PPP loan application during COVID and now realize some employee count numbers may have been inaccurate.

Could this be considered fraud?

Attorney's Answer

Inaccuracies in PPP applications can trigger federal fraud charges carrying up to 20 years in prison. However, honest mistakes differ from intentional misrepresentation. Documentation of your good-faith efforts is critical to your defense.

This is general information only. Contact us for advice specific to your situation.

Corporate audits function as a form of transparency. This allows external entities with a stake in the company to review the internal operations and come to a conclusion about the issue of fraud. The investigation will seek to determine if the company is compliant with the policies regarding the PPP loans. Audits allow company executives to mount a credible defense against any allegations or investigations of fraud.

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