Forgery Charges Related to PPP Loan Documents.

We are reviewing the pages available for this website. We cannot identify a specific federal PPP statute prohibiting forgery, and we do not know if a specific federal PPP statute prohibiting forgery has been enacted. But the federal government’s law enforcement agencies have the authority to prosecute fraud and false statements under federal statutes that fall outside of the scope of PPP.

In order to understand the nature of PPP-related fraud charges, it is necessary to look at the nature of the program itself. As an overview:

• The CARES Act created the Paycheck Protection Program (PPP) as a COVID-19 relief lending program.
• The Small Business Administration administered PPP through participating private lenders.
• PPP loan proceeds could qualify for forgiveness when they met requirements and criteria adopted by the government.
• PPP borrowers could seek loan forgiveness by certifying their compliance with approved-use and certification requirements.
• Loan forgiveness does not shield borrowers from criminal liability for providing forged documents in their forgiveness applications.

When we reviewed the pages available for the government’s websites, we were unable to find a specific federal PPP forgiveness statute prohibiting forgery. We don’t know if a specific federal PPP forgiveness statute prohibiting forgery has been enacted. But the federal government’s law enforcement agencies will seek to prosecute fraud and false statements under the federal statutes we have already identified in order to target any alleged forgery within PPP forgiveness applications. If the government’s law enforcement agencies pursue criminal charges for fraud or false statements for certifications submitted in PPP forgiveness applications, they will do so under federal statutes.

When are PPP Document Allegations Usually Charged as Forgery?

As we’ve just discussed, we are not familiar with a specific federal PPP forgery statute, and our search of the government’s available records failed to yield any reference to a specific federal PPP forgiveness statute prohibiting forgery.

So the government’s law enforcement agencies will likely use the general federal fraud and false statements statutes to prosecute any individual or entity involved in PPP document allegations. With this in mind, it becomes paramount for any individuals or entities facing PPP-related fraud allegations to promptly engage experienced federal defense lawyers to seek to avoid criminal prosecution.

Which Alleged PPP Document Conduct Can Become a Federal Charge?

Misusing others’ information to apply for loan funding can expose individuals and businesses to identity-theft-related allegations. In many cases, businesses and individuals that allegedly used other parties’ information to apply for loan funding did so as part of a scheme to defraud the government. Here, too, any identity-theft-related allegations could create additional exposure to criminal liability. This type of fraud can also lead to federal prosecution. If you have made false certifications in a PPP loan application, the government can use this against you to pursue federal charges.

When you make false certifications in a loan forgiveness application, you risk exposure to both fraud and false statements charges. As mentioned earlier, seeking PPP loan forgiveness can be an extremely risky process. Even if the government denies your loan forgiveness application or if you have already paid back your PPP loan in full, you still need to take any government investigations regarding your loan very seriously. There are multiple reasons why. For one, making false certifications in a loan forgiveness application can trigger criminal charges under several different federal statutes. Another example is that, under 18 U.S.C. § 1014 , false statements to a financial institution are a federal crime in and of themselves. This demonstrates why it is imperative that you engage experienced federal defense counsel promptly when you face a government investigation.

If you are at risk of facing charges under 18 U.S.C. § 1343 , wire fraud, you can expect to be facing up to 20 years of federal imprisonment for each count if convicted. In many PPP-related fraud cases, it is common for the DOJ and U.S. Attorney’s Office to charge federal defendants with conspiracy as well. Under 18 U.S.C. § 1349 , conspiracy carries the same maximum penalties as the underlying offense.

If you or your business is under investigation for forging documents, then it is important that you promptly engage experienced federal defense counsel to protect your rights and help you avoid a criminal conviction. This is especially true if the government is targeting you for PPP-related fraud. If you or your business is facing an investigation, or if you or your business has been charged for PPP-related fraud, we encourage you to reach out to us today. We offer free consultations.

If federal agents are at your door, the firm's advice is the same as every defense lawyer's: say you want your lawyer, then stop talking.

How Can a PPP Audit or Investigator Contact Become a Criminal Case?

On May 17, 2021, the DOJ created the COVID-19 Fraud Enforcement Task Force. The Task Force targets fraud, waste, and abuse involving COVID-19 relief programs. One of the main types of fraud being prosecuted by the Task Force is PPP-related fraud. As a result of the fraud perpetrated under PPP, the federal government is pursuing numerous criminal charges. The DOJ’s Fraud Section leads many of these CARES Act-related investigations and prosecutions, and it has indicated that it will pursue prosecutions in some cases to deter future illegal behavior.

In addition to the DOJ Fraud Section, the FBI investigates PPP-related allegations of fraud as well. Along with the DOJ Fraud Section and the FBI, some allegations under PPP involve investigations being led by the SBA’s OIG and the IRS’s Criminal Investigation division. The federal government typically uses subpoenas, search warrants, and interviews to gather evidence for criminal trials. The federal government may send a target letter during a criminal investigation, but target letters are not required by law and may not be appropriate in every case.

For one, receiving a subpoena is a common way an individual or entity can become involved in a PPP-related criminal investigation. If the government believes you may have been involved in PPP-related fraud, it may send a subpoena to obtain records related to your application for PPP loan funding. Another example is receiving a target letter. A target letter is a notice from the government identifying you as a target in a criminal investigation. When you receive a target letter, you should engage experienced federal defense counsel promptly to protect your rights and help you avoid criminal prosecution.

Individuals and entities can also get involved in PPP-related criminal investigations through a PPP audit. For example, a PPP loan auditor may ask questions that provide insights for a federal prosecutor to pursue a criminal case. Finally, you could become involved in a PPP-related criminal investigation when a federal agent reaches out to you with questions about your application for PPP loan funding. Federal agents from the FBI, DOJ, OIG, and IRS may contact you if they believe you were involved in PPP fraud.

What Can PPP Document Allegations Cost Beyond Repayment or Loan Loss?

If the government pursues charges for bank fraud or making false statements to financial institutions under the federal statutes we identified above, you will face severe penalties. If convicted under 18 U.S.C. § 1344 , the charge of bank fraud carries a potential prison sentence of up to 30 years. It also authorizes fines reaching $1 million per count. If you are charged with making false statements to financial institutions under 18 U.S.C. § 1014 , that charge can carry a similar maximum prison sentence and fine.

For an individual or business accused of PPP fraud, making false certifications can lead to civil liability under the False Claims Act (FCA) as well. The FCA imposes liability for a broad range of government programs, and it permits the federal government to seek treble damages for qualifying losses. Forged PPP documents that lead to fraudulent federal benefit disbursements qualify as “losses,” and the federal government can seek to recover three times the amount of the forged proceeds from the allegedly liable parties. The FCA also authorizes separate civil penalties per violation.

The loss amount involved in a PPP fraud case is a key factor in determining the risks involved. For criminal cases, the loss amount can determine prosecutors’ level of interest, and if you are convicted, it can influence prosecutors’ federal sentencing-guideline recommendation. If you face civil liability under the FCA for forging PPP loan documents, the loss amount will also determine the amount of damages and penalties at risk. As a result, any individual or business accused of forging PPP documents needs to determine what its exposure is and work with experienced defense counsel to pursue all available options.

Talk to Spodek Law Group

Every case turns on its own facts, and general information is no substitute for advice about yours. Todd Spodek, managing partner of Spodek Law Group, and the firm's attorneys defend federal criminal and white collar matters nationwide. Reach the firm at 888 348 8028.