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PPP Loan Fraud Lawyers

April 12, 2021

PPP Loan Fraud Lawyers

For many businesses in 2020, receiving financial help through the Paycheck Protection Program has meant the difference between staying open or going bankrupt. Part of the CARES Act enacted by Congress in March 2020, the PPP as it’s known has distributed billions of dollars to businesses across the United States. However, along the way there have been many allegations of business owners and others gaining access to PPP loans through fraudulent means. While there have of course been people using various scams in this situation, there have been far more business owners who made honest mistakes due to confusion about the program’s rules and requirements. However, the federal government is often choosing to assume people are guilty until proven innocent. If you have been visited by federal agents or believe federal fraud charges against you and your business are a possibility, meet with and hire PPP loan fraud lawyers as quickly as possible.

Why So Much Scrutiny?
As to why the federal government is focusing so much scrutiny on the PPP, the answer can be summed up in the amount of $350 billion. Having dispersed at least this much money through the PPP, the federal government is currently unhappy at the amount of negative publicity generated about the PPP. With so many business owners scrambling to fill out applications and lenders trying to make sense of the rules associated with the loan program, the result has been chaos each and every step of the way. Also, while $350 billion is certainly an enormous sum of money, the fact is these funds were depleted in a very short period of time, raising concerns many people and businesses received funds to which they were not entitled. Because of this, authorities are now using the government’s database of PPP information to examine all transactions made within the program, hoping to uncover evidence of widespread fraud. If you believe you did nothing wrong but are still being threatened with fraud charges by the government, talk over your situation with experienced PPP loan fraud lawyers at once.

Lenders Blaming Businesses
While business owners have certainly had a responsibility to understand the rules of the PPP prior to applying for loans, lenders have also had a responsibility to uphold their end of the deal regarding rules and regulations. However, as the Treasury Department has sought feedback from lenders as to why so much confusion and possible fraud has taken place, lenders have essentially placed much if not all of the blame on business owners. By doing so, they have in fact empowered federal investigators to dig even deeper into these transactions to find evidence of fraud, when in fact it simply may not exist in many cases. Thus, if you worked closely with your lender and secured PPP funding, it is possible your lender is now trying to throw you under the bus to the federal government. Should you suddenly receive a letter from the U.S. Attorney General’s office or perhaps a visit from federal investigators regarding your PPP loan, assume fraud charges may not be far behind. But instead of panicking and procrastinating, contact PPP loan fraud lawyers who know how to handle these cases and get positive results for their clients.

Fraud Charges
If the federal government comes along and does in fact threaten you with fraud charges, it could be due to one or more reasons. For many business owners, they are being accused of loan stacking, meaning the federal government supposedly has evidence showing you received PPP loans from more than one lender, which is prohibited. In other situations, the government will claim you willfully misled lenders and the government by putting false information on your PPP loan application. For some business owners, the federal government will allege they used the PPP funds they received for purposes other than those which are allowed by law. According to rules associated with the PPP, money given to businesses could only be used to pay employees, rent, utilities, or interest from mortgages. However, the expenses that could be paid must have already been in existence as of February 15, 2020, making it likely many recipients did not understand this and thus used their loans for what the government deems illegal expenses. If this is what happened to you, trying to explain this to the government on your own will be futile. To protect your rights while your situation gets resolved, let PPP loan fraud lawyers examine the evidence and speak to federal authorities on your behalf.

Penalties for PPP Loan Fraud
Whether you are threatened with PPP loan fraud by federal agents or have already been charged with fraud by prosecutors, you no doubt have been told of the severe penalties you could face if found guilty of fraud. Along with financial penalties that could include fines and paying back the money you received from the government, there is also the chance you could be sent to prison for several years or more. Since investigators will use these threats of fines and prison to get you to start talking to them, many people do so and make critical mistakes in regards to incriminating themselves. Instead of doing this, choose to use the rights granted you by the U.S. Constitution and say as little as you can to investigators or prosecutors. Once you make this decision, contact PPP loan fraud lawyers and schedule an immediate consultation.

PPP Loan Fraud Lawyers

If you’re looking for a PPP loan fraud attorney, we are here to help you. the CARES act was intended to provide benefits to indivduals and companies that were impacted by COVID-19. The major component of the CARES Act was the PPP – Paycheck Protection Program – which was meant to provide assistance to businesses that were facing financial difficulties. This program is administered through the SBA in conjunction with private banks.

Due to the large amount of money allocated to the PPP program – the government, and private banks, worked together to determine irregularities or fraud. Currently both federal and state law enforcement agencies are conducting investigations of individuals and businesses that applied for PPP loans. Federal and state agencies are looking for loan stacking – where a company took multiple PPP loan simultaneously from different banks. In addition, agencies are looking at unauthorized uses of PPP funds, and fraudulent loan forgiveness certification.

If your company is being investigated, or audited, your actions can determine whether you face potential criminal charges. If you make false statements to law enforcement agents, this can be charged as a separate crime. Anyone under audit, or investigation, has to avoid disclosing information which could be incriminating. It’s important to not make any misrepresentations during an audit or investigation. Below are a list of potential federal criminal charges, related to PPP fraudulent loans:

1. 15 U.S.C. § 645 – False Statements, Commerce Fraud
2. 18 U.S.C. § 371 – Conspiracy to Make False Statement
3. 18 U.S.C. § 1001– Making a False Statement
4. 18 U.S.C. § 1014 – False Statement to a Bank
5. 18 U.S.C. §1343 – Wire Fraud
6. 18 U.S.C. § 1344 – Bank Fraud
7. 18 U.S.C. § 1349 – Conspiracy to Commit Bank Fraud

Early intervention by PPP loan fraud lawyers is the key to a proper defense

It’s important to have an experienced and knowledgable PPP loan fraud attorneys who are here to help you – and understand the ramifications of the issues you face. Critical issues, like how your case will be filed – and what charges will be filed against you, how they are decided, and whether you will be arrested – are critical. Whether your case goes in front of a grand jury or not, etc, are all important questions. It’s crucial you hire a PPP loan fraud lawyer to help you, and represent you.

Can your company be prosecuted for PPP loan fraud?

The CARES act was supposed to provide benefits to individuals and companies impacted by COVID-19. The Paycheck Protection Program (PPP) was created by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The program was intended to provide loans to small businesses so they could keep workers employed during the COVID-19 pandemic.

In order to qualify for a PPP loan, a business must have fewer than 500 employees. The loan can be used for salaries, payroll taxes, mortgage interest payments on commercial real estate property that is leased or owned by the business, rent payments on commercial real estate leased or owned by the business, and utility payments. Businesses can also use funds from PPP loans for working capital expenses such as inventory purchases and accounts payable obligations. In order to qualify for full forgiveness of a PPP loan, at least 75% of the loan amount must be used on payroll costs; otherwise partial forgiveness may be available if 60% or more of the funds were used on payroll costs.

Because Congress authorized $349 billion in funding for this program without any specific guidance from federal agencies regarding how it should be implemented, there has been some confusion about what qualifies as an eligible expense under PPP guidelines. This has led some small businesses to apply for loans when they were not actually eligible or when they did not intend to use them solely for their stated purposes. It has also resulted in some larger companies receiving loans that were originally intended only for small businesses. These actions may constitute fraud under both federal and state laws if it can be proven that false information was submitted in order to obtain these loans. Some banks are already conducting internal investigations into possible fraud related to PPP applications while others have refused to process applications due to concerns about possible fraudulent activity. If your company received a PPP loan based on false information or you are being investigated by your bank or another government entity related to your application for a PPP loan, you should contact an experienced white collar criminal defense attorney immediately.

Despite the size of the Paycheck Protection Program, it ran out of funds. Lenders who participated in the PPP program were flooded with applications, and many companies who were eligible for the funds were left in the cold.

Concerns Related to the PPP Program

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PPP Loan Fraud Lawyers

November 9, 2020 Federal Criminal Attorneys

Covid-19 pandemic has affected many people and companies. Earlier this year, the CARES act was signed into law. The intention was to provide benefits to companies and individuals affected by the pandemic. One of the programs under the CARES act was the paycheck protection program (PPP). With almost $350 billion, the PPP goal was to provide loans to small-sized businesses affected by the Covid-19 pandemic.

Surprisingly, the PPP program exhausted its funds within a short period. Even though the applications were overwhelming, many eligible companies didn’t receive any financial relief. As a result, people are raising questions concerning PPP loan fraud. Therefore, companies that benefited from the program should expect a visit from the federal authorities.

If federal authorities are investigating you for PPP loan fraud, the chances are that you acquired the loan by pretense. The loan had favorable rates and was forgivable, depending on how you used the money. Your business must have less than 500 full-time employees to qualify for a loan.

What Is PPP Loan Fraud?

The federal authorities will investigate your business for fraud if you acquired a PPP loan, and you weren’t eligible. If the authorities discover that you cheated, you risk going to prison, paying fines, or repaying the loan immediately. Examples of PPP loan fraud include:

  • Inflating payroll cost to acquire more money
  • Claiming that you are going to use the loan for qualified expenses
  • Insisting that the pandemic has affected your small-sized business
  • Claiming that you have employed less than 500 individuals

There are many ways to commit PPP loan fraud. The charges you face mostly depends on the fraud you commit. The authorities might charge you with bank fraud, identity theft, wire fraud, and making false statements. If several people work together to acquire a PPP loan fraudulently, the authorities can charge all of them with conspiracy.

Penalties for PPP Loan Fraud

Even though PPP loan fraud is an offense, you can disapprove of the allegations. With the help of an attorney, you can prove that you had no intention to defraud. At times, filling loan applications can be a complicated and stressful procedure. Therefore, you are likely to fill in some of the information incorrectly.

Secondly, the SBA can make a mistake. Ensure that you keep records of emails, texts, and phone calls. The above will help you prove your innocence in case federal authorities accuse you of PPP loan fraud. You can also provide invoices and receipts to prove you aren’t lying when you apply for loan forgiveness. If you are a non-citizen, the chances of being deported are very high.

What Constitutes PPP Loan Fraud?

Like most federal programs, some acts or omissions can lead to federal authorities’ investigation. The following qualifies you for PPP loan fraud allegations:

Loan Stacking

It is whereby an individual applies and receives PPP loans from several lenders. The main focus will be on this type of fraud, mainly because the government can track how the lenders distributed PPP funds.

Application Fraud

There are eligibility criteria that one must follow to qualify for a PPP loan. Filling false information to be eligible for a PPP loan is exercising fraud. Misinterpreting the following information is a crime:

  • The number of employees in your company
  • Classifying some of your employees as private contractors

Fraudulent Loan Certification

You must certify several facts to qualify for a PPP loan. The certifications must be made in good faith to avoid federal charges. It is a must that you prove the following facts:

  • You will only use the funds to maintain payroll, retain workers, make utility payments, or pay a mortgage.
  • You will not apply or receive another PPP loan.
  • You will only provide accurate information and supporting documents.
  • You will use the loan to support your business during the covid-19 crisis.

Using the PPP loan for Other Purposes

You are committing fraud if you use PPP loans for purposes other than pay rent, cover payroll costs, pay utility bills, and pay mortgages. Therefore, you should document all payments, whether non-eligible or eligible. Using PPP loans for fraudulent purposes can lead to allegations of fraud.

Fraudulent Certification

If you qualify for a PPP loan, then you are eligible for loan forgiveness. However, to apply for loan forgiveness, you must the necessary documents to prove that you used the loan for authorized expenses. Additionally, you must certify that all your documents are accurate.

Misrepresenting Information during an Investigation

During an audit or an investigation, you should not misrepresent or conceal important information. However, ensure that you don’t disclose any potentially-harmful information. You are committing fraud if you withhold information or make false statements to federal authorities.

What to Do When Being Investigated For PPP Loan Fraud

If federal authorities are investigating you for PPP loan fraud, you should seek the help of a PPP fraud defense lawyer. It is not advisable to give any information to federal authorities without legal representation. A qualified federal criminal defense lawyer can help do the following:

  • Meet investigative deadlines.
  • Carry out an internal investigation.
  • Develop an effective strategy to help deal with investigators.
  • Develop a defense strategy to help achieve a pre-charge resolution.
  • Develop a litigation defense strategy, etc.

It is important to note that PPP loan fraud cases are not the same. Therefore you need to hire a lawyer capable of providing individualized attention. Choosing the right lawyer can be challenging. Fortunately, you can ask for recommendations from relatives or friends.

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