Criminal Defense Lawyers

Alabama PPP – SBA – EIDL Loan Fraud Lawyers

Alabama PPP – SBA – EIDL Loan Fraud Lawyers

The COVID-19 pandemic led to an unprecedented level of federal assistance for small businesses, including the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) program administered by the Small Business Administration (SBA). While these programs provided a lifeline for many businesses impacted by the pandemic, the speed at which they were implemented unfortunately also led to widespread fraud and abuse.In Alabama specifically, federal prosecutors have been aggressively pursuing cases of PPP and EIDL fraud over the past couple of years. Here’s an overview of some of the issues and cases in Alabama, as well as tips for businesses and individuals who may find themselves under investigation.

PPP and EIDL Program Overview

First, a quick refresher on how the PPP and EIDL programs worked. The PPP provided potentially forgivable loans to help small businesses cover payroll and other expenses during COVID-19 shutdowns and slowdowns. To have the loans forgiven, borrowers had to spend the money on eligible expenses over a set period of time. The EIDL program provided low-interest loans of up to $2 million to help businesses meet financial obligations and operating expenses. EIDLs did not have to be repaid if the funds were used for certain purposes.The programs were rolled out very quickly in 2020 to get money into the hands of struggling businesses. This speed, combined with loose eligibility requirements, lack of verification, and oversight made the programs prime targets for exploitation.The SBA Inspector General estimates over $200 billion in potentially fraudulent PPP and EIDL funds were distributed nationwide. The U.S. Department of Justice (DOJ) has made prosecuting pandemic fraud a top priority. Federal prosecutors across the country have filed hundreds of cases, including many in Alabama.

PPP and EIDL Fraud Cases in Alabama

Here are some examples of PPP and EIDL fraud cases that have been prosecuted in Alabama since 2020:

• In October 2022, two owners of a talent agency in Birmingham were charged with fraudulently obtaining over $500,000 in PPP loans. Prosecutors allege they falsified payroll expenses to qualify for larger loans. The defendants then allegedly used the money to purchase luxury items like jewelry and vacations.
• A Huntsville nurse practitioner was charged in August 2022 with fraudulently obtaining $1.5 million in PPP and EIDL loans. Prosecutors say she falsified documents to get loans for fake businesses, then used the money for personal purchases.
• An Alabama man pleaded guilty in June 2022 to fraudulently obtaining $1.6 million in PPP loans for phantom businesses. He allegedly submitted bogus payroll records, then used the money to buy luxury vehicles and real estate.
• In April 2022, a Birmingham tax preparer was charged with wire fraud and money laundering related to $1.4 million in fraudulent PPP loans. Prosecutors say she helped clients get approved for PPP loans based on fake documents, charging them kickbacks in return.
• The former police chief of Brookside, Alabama was indicted in March 2022 for allegedly obtaining $5,000 in fraudulent EIDL loans. Prosecutors say he lied about the number of employees and used the money for personal purchases.

These are just a handful of the dozens of cases involving millions in potentially fraudulent PPP and EIDL funds that have been prosecuted in Alabama federal courts. Most charges so far have involved making false statements and falsified documents to obtain or qualify for larger loans. Other common allegations include using loan proceeds for personal purchases instead of approved business expenses.The cases send a clear message – PPP and EIDL fraud is being taken very seriously. So what should you do if you find yourself being investigated?

Responding to a PPP or EIDL Fraud Investigation

Receiving a subpoena, visit from federal agents, or notice you are under investigation for PPP or EIDL fraud can be terrifying. Here are some tips for responding:

• Don’t panic. An investigation does not necessarily mean you will be charged. Don’t automatically assume you are guilty.
• Don’t try to handle it alone. Retain an experienced federal criminal defense lawyer as soon as possible. This is critical for protecting your rights.
• Be cautious about communications. Do not speak to investigators without your attorney present. Assume conversations and digital communications are being monitored.
• Gather and preserve documents. Financial records, loan applications, receipts, bank statements, and anything related to your PPP or EIDL loan should be collected and preserved. Your attorney can help ensure you don’t inadvertently destroy evidence.
• Understand the charges. Charges may include wire fraud, bank fraud, making false statements, aggravated identity theft, and money laundering. Know the elements prosecutors must prove for each charge.
• Assess your defenses. An experienced attorney can review the evidence and determine if you have grounds to fight the charges, such as showing the loan funds were used properly or documents contained unintentional errors rather than purposeful misrepresentations.
• Explore resolution options. In some cases, it may be in your best interest to explore pretrial diversion or a plea agreement to avoid the risk and expense of trial. Your lawyer can advise you on the pros and cons.

Maneuvering a federal fraud investigation is complex and the stakes are extremely high. The worst thing you can do is underestimate the gravity of the situation. Work closely with your attorney at every stage to protect your rights and build the strongest defense.

Alabama PPP and EIDL Fraud Defense Lawyers

If you are being investigated for PPP, EIDL, or other COVID-19 relief fraud in Alabama, time is of the essence to consult an experienced federal criminal defense attorney. Don’t go it alone against seasoned federal prosecutors.

Look for an Alabama lawyer who has specific experience defending complex white collar fraud cases in federal court. Understand how federal sentencing guidelines work and the sentencing ranges for different fraud charges. Be familiar with common defenses and strategies for achieving the best possible outcome.

Defense lawyers can also serve as an intermediary with prosecutors to open lines of communication and advocate for you. Having strong legal counsel sends a message you are taking the charges seriously.Alabama has many qualified fraud defense attorneys to choose from. Ask trusted contacts for referrals or search sites like Avvo and the Alabama State Bar to find experienced local lawyers.