NATIONALLY RECOGNIZED FEDERAL LAWYERS
Last Updated on: 14th September 2023, 01:16 am
Defending Against Allegations of PPP Loan Fraud
The Paycheck Protection Program (PPP) was an emergency loan program created in 2020 under the CARES Act to help small businesses impacted by COVID-19. The loans could be forgiven if used for payroll, rent, utilities and other approved expenses. While PPP provided a lifeline for many companies, allegations of fraud have emerged. Some business owners are accused of making false statements on applications or misusing the money. If you’re being investigated or charged with PPP fraud, consulting an experienced defense attorney right away is critical.
Common Types of Alleged PPP Loan Fraud
Some common PPP fraud accusations include:
- Exaggerating payroll expenses or number of employees on the application
- Using funds for unauthorized expenses instead of approved costs like payroll and rent
- Claiming payroll for fake employees or shell companies
- Applying for multiple PPP loans through different lenders
- Failing to disclose criminal history or pending charges on the application
- Falsifying records to make it look like funds were used properly
PPP fraud can lead to civil and criminal consequences. The Small Business Administration may seek repayment of the loan, damages, and disbarment from SBA programs. Criminal charges could include wire fraud, bank fraud, false statements, or money laundering. Penalties can be severe – multi-year prison sentences and large fines.
Building an Effective PPP Fraud Defense
Defending against PPP fraud requires an experienced federal criminal defense attorney. Key elements of an effective defense include:
- Thorough investigation – Your lawyer gathers documents, interviews witnesses, reconstructs events to identify weaknesses in the prosecution’s case.
- Analyzing intent – Most PPP charges require intent to defraud. Your attorney can argue you acted in good faith without criminal intent.
- Leveraging unclear PPP rules – Rules were unclear early on which your lawyer can use to your advantage.
- Negotiating with prosecutors – Your lawyer may negotiate dismissal of charges or reduced penalties pre-indictment.
- Suppressing evidence – If evidence was obtained illegally, your attorney can file a suppression motion.
- Taking case to trial – If charges aren’t dismissed pre-trial, your lawyer defends you before a judge and jury.
After examining the prosecution’s evidence and theories, an experienced lawyer crafts a defense strategy tailored to your specific case.
Common PPP Fraud Defenses
Some common PPP fraud defenses:
- Lack of intent – Arguing any misstatements were unintentional mistakes, not intentional deception.
- Good faith – Asserting you tried in good faith to comply with unclear PPP rules.
- No knowledge – Claiming any wrongdoing was done without your knowledge by an employee or third party.
- Reliance on accountant – Arguing you relied on your accountant’s advice about eligibility, expenses, etc.
- Loan forgiveness – Showing the loan has been forgiven, negating any loss.
- Selective prosecution – Proving you were unfairly singled out compared to other PPP recipients.
An experienced lawyer assesses which defenses fit your unique circumstances and are most likely to succeed.
If You’re Under PPP Fraud Investigation
If you learn you’re being investigated for possible PPP fraud, it’s essential to:
- Not speak to investigators without your lawyer present.
- Politely decline to answer questions and assert your right to counsel.
- Gather and preserve all documents related to your PPP loan application and use of funds.
- Consult an experienced federal criminal defense lawyer right away.
- Follow your lawyer’s advice about responding to subpoenas or requests.
- Have your lawyer interface with investigators for you going forward.
A skilled PPP fraud defense attorney can often resolve an investigation before charges are filed. Don’t wait to engage counsel if you learn you’re being scrutinized.
Why Hiring the Right Lawyer Matters
Retaining an experienced federal criminal defense lawyer is critical for PPP fraud accusations because:
- PPP fraud cases involve complex federal lending laws and regulations.
- Early PPP rules were vague and changed frequently.
- Prosecutors often aggressively pursue PPP fraud cases.
- Potential penalties are severe – multi-year prison sentences.
- Your lawyer’s negotiation skills could mean the difference between prison or avoiding charges.
An experienced PPP fraud defense lawyer has the skills to protect your rights, avoid conviction, and achieve the best possible outcome.