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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.
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.