Criminal Defense Lawyers

Atlanta PPP – SBA – EIDL Loan Fraud Lawyers

Atlanta PPP – SBA – EIDL Loan Fraud Lawyers

The Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) program, administered by the Small Business Administration (SBA), was supposed to provide emergency financial relief to small businesses impacted by the COVID-19 pandemic. But these programs have also been exploited by fraudsters looking to take advantage of the system.

High-Profile Fraud Cases in Atlanta

In Atlanta specifically, there have been several high-profile cases of PPP and EIDL fraud prosecuted by the Department of Justice.

$3 Million Fraud Ring

One of the most shocking examples was an 11-person fraud ring based in Atlanta that secured around $3 million in PPP loans by submitting fraudulent applications on behalf of 10 businesses in Georgia and South Carolina.Rodericque Thompson recruited several individuals to participate in the scheme, including Micah Baisden, Travis Crosby, Stanley Dorceus, Keith Maloney, Tabronx Smith, Mark Stewart, Timothy Williams, Thomas Wilson, and Kenneth L. Wright, Jr.Thompson helped the business owners obtain $300,000 PPP loans each by fabricating financial records, payrolls, tax documents, and other application materials. The applications contained numerous false statements about the companies‘ operations, employees, and payroll expenses.After the loans were approved, Thompson took approximately 50% of the proceeds as payment for his role in the fraud. The defendants spent the money on personal purchases like vacations, cars, and luxury goods.In January 2023, the 11 men were sentenced to between 1 and 4 years in federal prison for their involvement in the $3 million scheme. The case was prosecuted in the Northern District of Georgia by the U.S. Attorney’s Office. 

Former Atlanta Official Charged

Another recent case involved Howard Evans, a former Assistant City Attorney for Atlanta, who was charged with defrauding over $7 million in PPP funds.Evans obtained loans for multiple businesses he controlled and spent the money on personal expenses. The indictment alleged that Evans submitted fraudulent payroll records, tax documents, and profit/loss statements for companies that had little to no actual operations.After receiving the loan proceeds, Evans did not use the funds for permissible business expenses like payroll, rent, or utilities. Instead, he purchased luxury vehicles, vacations, and a $1.2 million home.Evans was charged with wire fraud, bank fraud, and making false statements. If convicted, he faces up to 30 years in prison. The case is being handled by the U.S. Attorney’s Office for the Northern District of Georgia and demonstrates that even legal professionals and public officials are being held accountable for COVID relief fraud. 

Understanding the Penalties

With federal prosecutors aggressively pursuing PPP and EIDL fraud cases, it’s important for small business owners and applicants to understand the potential penalties.Wire fraud and bank fraud charges carry sentences up to 30 years in prison and up to $1 million in fines per count. False statements can result in up to 5 years imprisonment. Restitution of the full loan amount is typically mandatory. Forfeiture of assets purchased with the proceeds is also likely.Beyond criminal liability, fraudulent borrowers can face civil lawsuits from the SBA and lenders seeking repayment of the loans. The SBA may pursue administrative enforcement actions like loan recalls or debarment from federal contracts. Lenders can sue civilly to recoup losses from the fraud.With such severe consequences at stake, having an experienced federal defense lawyer is critical.

Possible Defenses and Strategies

Knowledgeable attorneys can advise clients on potential defenses and try to negotiate favorable plea deals or settlements prior to indictment. In some cases, it may be possible to avoid criminal charges altogether through voluntary disclosure and repayment of the loans.For those charged criminally, skilled lawyers understand how to identify procedural flaws, contest improper searches, challenge unreliable witnesses, and suppress questionable evidence.They can also argue that the client had an intent to repay the loan or there were mistakes rather than intentional deceit. Juries may be sympathetic to the struggles business owners faced during the pandemic. In appropriate cases, attorneys can put the government to its burden of proof rather than recommend pleading guilty.Some possible defenses include:

• Lack of intent
• Good faith
• Duress
• Entrapment
• Statute of limitations
• Unclean hands
• Selective prosecution

An experienced attorney can assess which defenses may apply and formulate the most advantageous strategy. They will aggressively defend your rights, liberty, and livelihood. The government is cracking down hard on COVID relief fraud across the country. In Atlanta, federal prosecutors have already secured lengthy prison sentences for multiple PPP and EIDL scams. With an experienced legal team on your side, it is possible to mitigate risks and avoid the most serious penalties like incarceration. But you need to be proactive in engaging counsel early on.Do not wait to get help if you have any concerns about potential criminal or civil liability. Reach out for a free consultation with a reputable Atlanta federal defense firm to protect your rights.