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Last Updated on: 12th September 2023, 04:27 pm
Tampa PPP – SBA – EIDL Loan Fraud Lawyers: A Guide for Small Business Owners
The COVID-19 pandemic has hit small businesses hard. Many have struggled to stay afloat amid lockdowns, reduced business, and health concerns. The federal government stepped in to help through programs like the Paycheck Protection Program (PPP), Economic Injury Disaster Loans (EIDL), and others. While these programs have been a lifeline for some companies, they’ve also come with ample opportunity for abuse and fraud.If you’re a small business owner who has applied for or received COVID-19 relief funds in Tampa, you could find yourself under scrutiny. Federal investigators and prosecutors are ramping up efforts to crack down on PPP, EIDL and other fraud. But just because you’re being investigated doesn’t necessarily mean you’ve done anything wrong.This guide will walk you through the key fraud risks with COVID business loans and grants. It will also give you a crash course on your rights if you find yourself accused of Tampa PPP, SBA or EIDL fraud. Let’s get to it.
The Main Areas of Concern with COVID Business Loans
There are a few key ways that PPP loans and EIDL grants could be considered fraudulent by investigators:
Inaccurate Information on Applications
When you applied for PPP or EIDL funds, you had to certify that all the information you provided was truthful. That includes things like:
- Your number of employees
- Monthly payroll expenses
- Revenue losses due to COVID-19
If you fudged any of those numbers to get bigger loans or grants, you could be accused of fraud.
Misusing Loan Funds
PPP loans came with strict rules on how you could spend the money. It had to be used for payroll, rent, mortgage interest and utilities. Spending it on anything else—like personal expenses—is a red flag for fraud.The same is true if you got the loan, but didn’t actually have eligible business expenses to spend it on. Investigators will want to know why you applied for more than you needed.
Multiple Loans for the Same Business
You were only allowed to get one PPP loan per business. If you applied for and got multiple loans for the same company, that’s a problem. It doesn’t matter if it was from different lenders.
Loan Forgiveness Fraud
To get your PPP loan forgiven, you had to submit documentation showing you spent the funds on eligible expenses. If you falsified those records in any way, that’s fraud.
This one is especially serious. It involves using someone else’s name or business information to apply for loans or grants they aren’t entitled to. Penalties are severe.As you can see, there are plenty of ways legitimate business owners can make missteps and end up facing accusations. Just because you’re being investigated doesn’t mean you actually committed fraud.
Why COVID Business Loan Fraud is Being Crackdown On
In the rush to get emergency aid out to struggling companies, the approval process for PPP loans and EIDL grants was streamlined. This lack of safeguards left the programs wide open to abuse.The federal government allocated over $800 billion in COVID relief funds for small businesses. Unfortunately, a chunk of that money ended up in the hands of fraudsters. Some estimates suggest PPP fraud alone could top $80 billion.With that much taxpayer money at stake, the federal government is motivated to hunt down and prosecute fraud aggressively. The U.S. Department of Justice (DOJ) has already charged hundreds of individuals with PPP and EIDL fraud. And they say that’s just the beginning.The DOJ isn’t the only agency paying close attention to COVID business loans. The Small Business Administration (SBA) Office of Inspector General (OIG) is also auditing loans and referring cases for criminal investigation. So are federal inspectors general for the Treasury Department and other agencies.At the state level, attorneys general are ramping up prosecutions too. In Florida, AG Ashley Moody has been vocal about going after COVID relief fraudsters. Her office has already filed numerous charges for PPP, EIDL and unemployment fraud.With so many different agencies and prosecutors on the hunt, the risks are high if your business got COVID relief funds. But the good news is, an investigation doesn’t necessarily mean you’ll be charged. There are ways to defend yourself.
Your Rights if You’re Being Investigated for Tampa PPP or EIDL Fraud
Let’s say the SBA requests your loan documentation or federal agents show up wanting to interview you. What should you do?
The first thing is: don’t panic. Realize that law enforcement and regulators conduct investigations all the time. That doesn’t automatically mean you’ll be charged or prosecuted. There are many legitimate reasons why your loan could get flagged for review.For example, let’s say you made a mistake calculating payroll costs on your PPP application. You explain the situation to investigators and provide corrected documentation. If it was an honest error, they may close the case without pursuing charges.
Get Legal Help ASAP
Still, you shouldn’t take any investigation lightly. The risks are real, so it’s critical to get experienced legal counsel on your side immediately. A Tampa PPP fraud defense lawyer can protect your rights and interests from the moment you’re contacted.An attorney can deal with investigators directly so you don’t have to. They’ll ensure proper process is followed and prevent you from accidentally making statements against your own interests. Your lawyer can present evidence and make the case that charges aren’t warranted.If charges do get filed, a skilled fraud defense attorney can thoroughly analyze the prosecution’s case and build an aggressive defense. This is critical, because COVID loan fraud charges can lead to devastating penalties if not properly defended.
Understand Your Fifth Amendment Rights
You always have the right to remain silent when dealing with federal agents or investigators. They hope to pressure you into making incriminating statements they can use against you. Your attorney will advise you to keep quiet.That’s because anything you say can potentially be used to build a fraud case, even if you think you’ve done nothing wrong. So don’t try to talk your way out of the situation. That’s your lawyer’s job.