NATIONALLY RECOGNIZED FEDERAL LAWYERS
Last Updated on: 2nd October 2023, 03:02 pm
Navigating PPP and EIDL Fraud Allegations in San Antonio
The COVID-19 pandemic led to an unprecedented level of government 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 threw a critical lifeline to countless businesses, the speed at which they were implemented unfortunately left them vulnerable to fraud. Many business owners in San Antonio and nationwide now find themselves accused of misusing these funds, facing serious criminal charges as a result. My fellow attorneys and I have seen this firsthand in representing clients in the Alamo City and beyond. If you or your San Antonio business are being investigated for or charged with PPP or EIDL fraud, it is absolutely critical that you engage an experienced federal defense lawyer immediately; these are complex cases with potentially severe penalties, and the government will aggressively pursue them. In this article, I’d like to provide an overview of these loan programs; discuss potential allegations and defenses; and most importantly, offer advice on protecting yourself and your business if you find yourself accused of misconduct.
PPP and EIDL Program Overviews
As part of the CARES Act in March 2020, the SBA was charged with quickly distributing hundreds of billions of dollars in forgivable PPP loans and expanded EIDL loans to businesses impacted by the pandemic. The PPP allowed qualifying small businesses to receive low-interest private loans backed by the SBA, with the principal forgiven if the funds were used for permitted purposes like payroll, rent, and utilities. EIDL provided low-interest disaster loans up to $2 million. While well-intentioned, the speed and expanded eligibility of these programs left them vulnerable to exploitation by fraudsters; SBA Inspector General reports have identified billions in potentially fraudulent loans. As a result, oversight and enforcement have ramped up significantly. If your San Antonio business received PPP or EIDL funds, you could find yourself accused of fraud in applying for, receiving, or using the loans. Allegations could include: providing false information on applications; using PPP funds for non-permitted purposes like personal expenses or repayment of other debts; illegally obtaining multiple PPP or EIDL loans for the same business; and failure to disclose other SBA loans when applying. Charges can include wire/bank fraud, false statements, theft of government funds, money laundering, and aggravated identity theft. Penalties are severe, including multi-year prison sentences and restitution of all funds received. These are complex cases requiring experienced counsel.
Crafting an Effective Defense Strategy
While concerning, an investigation or charges do not necessarily mean you or your business engaged in intentional fraud. There are factual and legal defenses we can assert. For example:
- You may have made an honest mistake or misunderstanding on an application that does not rise to willful fraud. PPP and EIDL programs were rolled out quickly with complex, shifting requirements.
- Unauthorized employees or identity theft could be to blame – we can argue you were unaware of any wrongdoing.
- PPP funds can be used for a broad range of business expenses like supplier costs and operations expenditures. We can demonstrate your spending aligned with program rules.
- Loan stacking and multiple application rules were unclear initially – you may have thought additional borrowing was allowed.
- Constitutional and procedural challenges to the investigation may be viable.
An experienced attorney can carefully examine the facts of your case, build a defense, and negotiate aggressively with prosecutors to achieve the best possible outcome. This could mean getting charges dismissed or reduced, or securing a favorable plea agreement that avoids prison time. There are options even in the most serious cases.
Protecting Your Business and Your Future
If you have received any communication from the SBA Inspector General, FBI, IRS, or other agency regarding PPP or EIDL loans, take it extremely seriously and engage a lawyer immediately. The government may try quick plea deals or threats to get cooperation, but you have rights. An attorney can interact with investigators on your behalf, protect you from self-incrimination, and begin building your defense strategy. We can also provide proactive guidance on measures like tightening financial controls and corporate compliance programs to mitigate potential penalties down the road. For San Antonio business owners facing PPP or EIDL fraud accusations, the stakes could not be higher. These are complex cases that require experienced counsel to protect your interests. Do not go it alone. With an in-depth understanding of federal law and financial crime defense, we can carefully craft a strategy around the unique facts of your situation. My colleagues and I have successfully defended similar cases nationwide, and are here to help.