New Hampshire PPP Loan Fraud Lawyers.

The Paycheck Protection Program was created as part of the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act. The program was designed to provide forgivable loans to small businesses that were adversely affected by the economic downturn caused by the pandemic. However, the U.S. Small Business Administration (SBA) administered the program through a nationwide network of participating commercial lenders. Because the program was the result of a federal effort, all loans and the forgiveness requests processed under the program are subject to federal laws and regulations.

The Role of the DOJ, the U.S. Attorney’s Office, and the U.S. District Court

The Department of Justice (DOJ) is tasked with prosecuting federal crimes in federal court. Within the DOJ, United States Attorneys’ Offices are responsible for handling federal prosecutions in their respective districts. For those in New Hampshire, the federal government can pursue charges for PPP fraud in the U.S. District Court for the District of New Hampshire.

Investigating Federal PPP Fraud in New Hampshire

Before the DOJ pursues criminal charges, several federal agencies work closely together to investigate cases of potential PPP fraud. The FBI, the SBA Office of Inspector General (OIG), and the Internal Revenue Service (IRS) Criminal Investigation (CI) unit all participate in federal investigations. If you own a business in New Hampshire that has received a PPP loan, the FBI, SBA, and IRS may be looking into your company’s loan application and forgiveness request.

The Scope of Federal PPP Fraud Cases

PPP fraud cases can carry criminal and civil liability. In many cases, business owners who face criminal charges may also face civil enforcement. Additionally, the government may seek to recoup funds from those who received and were subsequently denied forgiveness. Federal prosecutors can also pursue individuals who may not have directly obtained a loan but who assisted the process in some way or who may have conspired with others to commit fraud.

How do Investigators Test for PPP Eligibility and Spending in New Hampshire?

If the FBI, SBA, and IRS are investigating your New Hampshire PPP loan, they will be looking at a wide range of your company’s records. This includes everything from your initial PPP loan application and your loan forgiveness application to your bank records, payroll records, and tax records. Based on what these records contain, you can be facing serious questions regarding your company’s eligibility for PPP funding and your use of the proceeds.

Are You Spending Your PPP Loan Funds on Unauthorized Personal Expenses?

One of the main concerns of the federal government is that PPP loan proceeds are being spent on unauthorized personal expenses. The Paycheck Protection Program was designed to provide forgivable funds for payroll and specific operating expenses in order to prevent the collapse of the U.S. economy. While these funds could be used for these purposes, any unauthorized use of them can lead to scrutiny of the borrowers’ PPP loan funds and loan forgiveness request.

Did Your PPP Loan Application Match Your Forgiveness Application?

The federal government has looked at PPP loan applicants’ records and has noted “numerous instances” of applicants whose loan applications and loan forgiveness applications did not match. Investigators will compare original PPP loan applications and later forgiveness applications to see if they match. PPP allegations can also lead to investigations regarding other PPP applicants. If someone who received a PPP loan in New Hampshire is found to have falsified documents, this can bring a new level of scrutiny to PPP loan forgiveness requests by other New Hampshire applicants.

Did Your PPP Loan Forgiveness Request Match Your Bank Records?

In addition to comparing New Hampshire businesses’ PPP loan applications and loan forgiveness applications, federal investigators will also look at bank records. Bank records can reveal how borrowers spent their PPP proceeds, or whether the proceeds went into the borrower’s or owner’s personal bank accounts.

For those under investigation for PPP fraud in New Hampshire, ensuring that loan forgiveness applications match bank records is critical.

Did Your PPP Loan Forgiveness Request Match Your Payroll Records?

One of the main components of a PPP loan application and forgiveness application is determining the number of employees and the average payroll amount. Investigators will look at New Hampshire business’s payroll records to test the claims in their PPP loan and forgiveness applications.

Which Legal Tracks Can Follow PPP Fraud Allegations?

Federal prosecutors have the choice to pursue PPP fraud allegations criminally, civilly, or through both tracks. However, whether federal prosecutors pursue a business owner’s conduct in federal criminal court or in federal civil court, those at risk of facing civil and criminal allegations for PPP fraud should seek early and experienced counsel to learn more about how these federal charges affect their civil and criminal liability.

Criminal Prosecution

The Department of Justice (DOJ) pursues federal criminal PPP fraud cases in federal court. Criminal charges for PPP fraud in New Hampshire can include:

• Wire Fraud under 18 U.S.C. § 1343. The federal government pursues wire fraud charges when it can allege that a defendant transmitted fraudulent information using interstate or foreign communications networks, such as the internet.
• Bank Fraud under 18 U.S.C. § 1344. This criminal charge applies when a defendant knowingly executes or attempts to execute a scheme to defraud a financial institution or to obtain its money or property by false pretenses.
• Other federal offenses that carry a possibility of incarceration for those convicted of attempting to defraud the federal government under the Paycheck Protection Program.

Civil Liability

While the DOJ investigates and prosecutes criminal cases, the DOJ can also pursue civil liability under the False Claims Act (FCA) at 31 U.S.C. § 3729. The FCA allows for the recovery of treble damages, and for losses that qualify, the DOJ can seek three times the amount the federal government lost. The government has seen success under the False Claims Act in recent years because many PPP fraud cases involve losses of government funds. This means that federal prosecutors can pursue civil False Claims Act liability for qualifying losses to the federal government even though commercial lenders provided funds that had been approved by the SBA under the CARES Act.

Families retain Spodek Law Group on behalf of someone they love every week of the year.

What Does an SBA Audit, Subpoena, or Search Warrant Mean?

For many business owners in New Hampshire, the first sign of an investigation into PPP fraud is the receipt of an SBA audit, a subpoena, or a search warrant. However, the importance of these inquiries varies. While an SBA audit or a civil investigative demand can represent a serious issue, receiving a grand-jury subpoena or a search warrant is a serious matter that should be handled as soon as possible with the assistance of experienced legal counsel.

Q: What is a civil investigative demand?

A civil investigative demand (CID) is often the first sign that the federal government has opened a False Claims Act investigation. For those who received PPP loan funds, a CID can be a sign that the DOJ is assessing your application or loan forgiveness request in connection with the False Claims Act.

Q: What is a grand-jury subpoena?

A grand-jury subpoena is typically a sign of a criminal investigation or proceeding. In the context of PPP loan fraud, grand-jury subpoenas are typically requested by United States Attorneys’ Offices on behalf of the Department of Justice. These subpoenas can request documents, testimony, and evidence related to a PPP loan, from information provided on the initial application to the borrower’s use of the funds.

Q: What is a search warrant?

A search warrant allows federal investigators to seize specific physical or digital evidence upon authorization from a judge. If you received a search warrant, it is imperative that you speak with an experienced PPP fraud lawyer in New Hampshire as soon as possible.

Q: Can I refuse an inquiry or destroy evidence?

In general, a person may decline voluntary questioning, but a subpoena may compel testimony or document production; a grand-jury witness may consult counsel outside the grand-jury room, where counsel generally cannot be present. However, if you have received an inquiry, you should be very careful about deleting or destroying evidence. At this stage in the inquiry, such actions can lead to concerns regarding the obstruction of justice.

What Can a Forgiven PPP Loan Still Cost in Federal Enforcement and Defense?

Generally, forgiveness approval does not necessarily preclude fraud investigation. For business owners in New Hampshire, it is important to understand that while the SBA approved their loan forgiveness request, this does not necessarily shield them from federal enforcement. The consequences of federal PPP fraud allegations and proceedings can differ based on the nature of the case and can involve a wide range of legal and financial burdens.

In federal PPP fraud cases, the following penalties can lead to significant costs:

• Restitution
• Forfeiture
• Fines
• Imprisonment

What Are the Costs of Defending a PPP Fraud Case?

How much it costs to defend against a PPP fraud allegation or proceeding can vary substantially with the investigation stage, the case’s complexity, and the needs for litigation. When facing PPP fraud allegations or the risk of criminal prosecution in federal court, it is critical for New Hampshire business owners to understand their defense budget. At Spodek Law Group, we tailor our pricing for each client to ensure that our PPP fraud defense lawyers can focus on the case at hand.

However, a competing law firm’s website mentions that for “serious federal defense,” costs may be in the range of “ $300,000 to $2 million.” This estimate is based on the firm’s experience with other federal charges, like money laundering, tax evasion, or insider trading, and does not necessarily represent a typical PPP fraud defense. Because this is one firm’s estimate for serious federal defense, it does not establish a market-wide PPP lawyer fee.

Among other factors that may affect costs are the number of borrowers and businesses under investigation, the level of cooperation with investigators, and any prior interactions with federal authorities. To understand the fees involved with defending against PPP fraud, it is best to consult with an experienced defense lawyer. We encourage you to contact our experienced New Hampshire PPP fraud lawyers to learn more about how we can help protect your business in PPP fraud investigations and litigation.

Calling About Someone You Love

Most first calls to a defense firm come from a family member rather than the person under investigation. If that is you, Spodek Law Group answers its phone at any hour, and families retain the firm on a relative's behalf every week. Reach it at 888 348 8028.