South Carolina PPP – SBA – EIDL Loan Fraud Lawyers

South Carolina PPP – SBA – EIDL Loan Fraud Lawyers

The COVID-19 pandemic led to unprecedented government assistance for small businesses and workers across the country. Programs like the Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL) distributed hundreds of billions in forgivable loans and grants to help businesses stay afloat during lockdowns and economic uncertainty. But with so much money flowing so quickly, fraud was rampant. Now, federal prosecutors are cracking down on PPP and EIDL fraud cases across the country, including here in South Carolina.

If your business or one of your employees is being investigated for potential PPP or EIDL fraud, it’s important to consult an experienced white collar criminal defense attorney right away. An investigation doesn’t necessarily mean you’ll be charged, but you need skilled legal counsel to protect your rights. A knowledgeable lawyer can evaluate the strength of the government’s case, advise you on possible defenses, and try to resolve the matter before charges are filed. Let’s take a closer look at how PPP and EIDL fraud cases are handled in South Carolina.

Overview of PPP and EIDL Programs

First authorized under the CARES Act in March 2020, the Paycheck Protection Program distributed over $800 billion in potentially forgivable loans to small businesses and nonprofits to cover payroll, rent, utilities and other expenses during COVID-19 shutdowns. Applicants self-certified that current economic conditions made the loan necessary, and that funds would be used to retain workers and maintain operations. The Small Business Administration approved millions of PPP loans through private lenders, with minimal vetting up front.

The Economic Injury Disaster Loan program predated COVID-19, but it too saw a massive expansion as part of the CARES Act and subsequent relief bills. EIDL provided low-interest, long-term loans of up to $2 million to cover operating expenses for small businesses and nonprofits suffering substantial economic injury due to the pandemic. Applicants self-certified their eligibility, and the SBA approved over $275 billion in EIDL loans. An additional $20 billion was distributed through EIDL Advance grants of up to $10,000 per business.

With the rush to get emergency aid out the door, however, came rampant fraud. The Justice Department has charged hundreds of PPP and EIDL fraud cases nationwide. Tactics have included falsifying payroll numbers, misstating number of employees, creating fake companies, identity theft, falsifying supporting documents, and misusing loan proceeds. Penalties can include fines up to $1 million and decades in prison.

PPP and EIDL Fraud Prosecutions in South Carolina

Dozens of PPP and EIDL fraud cases have been prosecuted in federal court in South Carolina. For example:

• In September 2022, Elliott James Brown of Georgia was convicted in South Carolina of fraudulently obtaining a $300,000 PPP loan. He faces up to 20 years in prison.
• In July 2022, Tremel D. Brown-Sanders of North Charleston was sentenced to 1 year in prison for fraudulently obtaining $191,000 in PPP and EIDL funds.
• In June 2022, Raymond M. Haile of Columbia was sentenced to 30 months in prison for fraudulently obtaining over $1.1 million in PPP and EIDL loans.
• In April 2022, Terri Lynn Maxwell of Columbia was sentenced to 2 years in prison for fraudulently obtaining $149,000 in PPP and EIDL funds.

Dozens more prosecutions are pending, and new cases are charged every month. The coronavirus may be fading, but PPP and EIDL fraud prosecutions are a major focus for federal prosecutors in South Carolina and nationwide.

Federal Charges for PPP and EIDL Fraud

Most PPP and EIDL fraud prosecutions in South Carolina are pursued under federal law. Common charges include:

• Wire fraud – using electronic communications to execute a scheme to defraud, punishable by up to 20 years in prison.
• Bank fraud – scheme to defraud a bank, punishable by up to 30 years in prison.
• False statements – knowingly making false statements to a government agency, punishable by up to 5 years in prison.
• Aggravated identity theft – using someone else’s personal identifying information without authorization, punishable by a mandatory 2 years in prison consecutive to any other sentence.

Prosecutors often stack multiple charges together based on the nature of the alleged fraud. Penalties add up quickly, creating extreme sentencing exposure. That’s why skilled defense counsel is so critical early in the process.