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Delaware PPP – SBA – EIDL Loan Fraud Lawyers
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Delaware PPP – SBA – EIDL Loan Fraud Lawyers
Introduction
The COVID-19 pandemic hit small businesses hard, leading the federal government to create emergency loan programs like the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) program. These programs pumped billions of dollars into the economy to keep small businesses afloat. However, the rush to get money out the door also created opportunities for fraud. Now, federal prosecutors are cracking down on PPP and EIDL fraud cases across the country, including here in Delaware.
Potential Charges
As a Delaware small business owner who received a PPP or EIDL loan, you could find yourself under investigation if the government suspects you misused the funds. These cases can lead to serious federal charges like wire fraud, money laundering, and false statements. Let’s break down how PPP/EIDL fraud cases work in Delaware, the potential penalties, and legal defenses that could help you avoid conviction, starting with the background on these emergency loan programs.
Loan Programs Background
The CARES Act created the PPP in March 2020 to help small businesses cover payroll, rent, utilities and other expenses during COVID-19 shutdowns and slowdowns. Companies can have the loans forgiven if they use at least 60% on payroll expenses. The SBA’s EIDL program also expanded dramatically, offering low-interest loans up to $2 million to help small businesses overcome temporary loss of revenue.Eager to prop up the flailing economy, the federal government approved PPP and EIDL loans rapidly with minimal vetting. By June 2020, the SBA approved $521 billion in PPP loans to 5.1 million borrowers and $192 billion in EIDL loans and grants to 3.6 million applicants. That’s a massive amount of money flowing out fast, so it’s no surprise scammers saw an opportunity.
Fraud Prosecution
The Department of Justice is aggressively prosecuting PPP and EIDL fraud schemes across the U.S., including here in Delaware. Federal prosecutors view these cases as serious crimes that damaged programs meant to help legitimate small businesses survive the pandemic. Let’s look at some real-world examples of how they tackle PPP and EIDL fraud in Delaware.In July 2021, federal prosecutors in Delaware charged Newark resident Ana Soto with wire fraud, SBA fraud and money laundering for allegedly filing fraudulent PPP and EIDL loan applications. According to the indictment, Soto falsely claimed on her applications that she operated businesses with large monthly payrolls. Prosecutors say she didn’t own any operational businesses. Soto allegedly received $27,500 in PPP loans and $150,000 in EIDL loans based on the bogus applications. She now faces decades in prison for those alleged lies to the SBA.In another Delaware case, prosecutors charged Bear resident Lavette Rollins with wire fraud and false statements. They allege Rollins filed fraudulent loan applications misrepresenting her payroll and number of employees. She purportedly received $27,500 in PPP loans and $150,000 in EIDL loans she wasn’t entitled to.
Penalties
As you can see, PPP and EIDL fraud can have serious consequences. Let’s look at the most common federal charges so you understand the penalties defendants face.Wire fraud is one of the top charges in PPP and EIDL fraud indictments. Under 18 U.S. Code § 1343, prosecutors can pursue wire fraud charges when a scheme to defraud involves electronic communications like submitting online loan applications. Wire fraud carries a penalty of up to 20 years in prison and a $250,000 fine or twice the amount obtained through fraud.Prosecutors often combine wire fraud charges with money laundering under 18 U.S. Code § 1957. It’s illegal to engage in monetary transactions with criminal proceeds over $10,000. Money laundering convictions can lead to 10 years imprisonment and significant financial penalties.Making false statements to obtain federal loans is another common PPP and EIDL fraud charge under 18 U.S. Code § 1001. Lying on an SBA loan application carries up to 5 years in prison and a $250,000 fine per offense.Prosecutors can also charge defendants with federal program fraud under 18 U.S. Code § 666 if they misuse PPP or EIDL funds. The penalty is 10 years imprisonment and fines.
Seeking Legal Counsel
As you can see, PPP and EIDL fraud can have serious consequences including years in federal prison and massive fines. These cases can be complex, so working with an experienced federal defense lawyer is critical. An attorney can carefully examine the evidence and determine if you have grounds to fight the charges.For instance, the government must prove you specifically intended to defraud the SBA and had knowledge your statements were false. However, many businesses faced unprecedented uncertainty during COVID-19 shutdowns. It can be challenging for prosecutors to prove business owners deliberately lied on their loan applications rather than making honest mistakes estimating payroll and revenue figures under rapidly changing conditions.An attorney can also scrutinize the strength of the government’s evidence and investigate whether any procedural errors occurred in the investigation. It’s essential to have a skilled federal criminal defense lawyer on your side analyzing whether you have any defenses to pursue.The bottom line is PPP and EIDL fraud charges shouldn’t be taken lightly. The government is pursuing these cases aggressively, and convictions can result in years behind bars plus massive fines. If you’re under investigation or have been charged, don’t go it alone. Consult with an experienced federal fraud defense attorney in Delaware as soon as possible.