San Francisco PPP and EIDL Loan Fraud Lawyers(0) Comment |
Stay Alert and Safeguard Your Business from Paycheck Protection Program Fraud
The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020, with a noble aim to provide economic relief to Americans affected by the COVID-19 pandemic. One of the programs under the CARES Act, the Paycheck Protection Program (PPP), was established to provide struggling small and medium businesses with crucial financial assistance.
With an astounding amount of $350 billion allocated to the PPP, the funds were instantly exhausted due to an avalanche of loan applications that left the lenders grappling to manage. Regrettably, any time the government offers a program of this magnitude, it leaves the door open for fraud.
Different Fraud Concerns Associated with PPP
The United States Treasury Department created the Paycheck Protection Program to help small and medium-sized businesses bounce back from their financial difficulties brought on by the COVID-19 crisis. Nonetheless, its sudden depletion birthed various types of fraud concerns. The chaotic nature of its application rollout caused confusion and created a window of opportunity for fraudsters.
PPP encountered fraudulent acts in different ways – intentional and inadvertent errors were made during its implementation phase. Lenders are expected to provide input through the U.S Treasury Department’s Office of Comptroller Currency (OCC) to improve it and address the issues that arose due to PPP’s loopholes. A heightened focus is on fraudulent identification considering errors with PPP and other relief programs facing similar challenges.
Which Companies are at Risk?
Several government agencies are now focusing on identifying companies that received PPP loans unlawfully, as the program gained widespread negative publicity after running out so quickly. Companies that have unlawfully received these loans face allegations, risking prosecution, substantial penalties, and heavy scrutiny from federal authorities.
Companies at risk must engage experienced federal counsel immediately. Seasoned lawyers can mitigate the risks associated with prosecution while staunchly protecting the business owners’ legal rights. They tirelessly work towards obtaining more favorable outcomes for clients confronted with fraud allegations.
The Many Faces of Paycheck Protection Program Loan Fraud
Different types of acts and omissions have the potential to lead to allegations of federal fraud concerning PPP. These include intentional misrepresentations, inadvertent mistakes that still resulted in the improper receipt of federal funds, and other prohibited acts under PPP.
The following are all potential allegations of fraud in relation to PPP:
|Types of PPP Fraud||Description|
|Loan “Stacking”||Applicants receiving loans from multiple lenders; the Office of the Comptroller Currency (OCC) focuses on this type of fraud due to its prevalence and tracking of PPP funds by the federal government.|
|PPP Loan Application Fraud||Providing false information on a loan application to fraudulently claim eligibility is illegal, and companies involved face prosecution.|
|Fraudulent Loan Certification||Bad-faith certifications made by applicants can result in charges for federal fraud.|
|PPP Forgiveness Fraud||Using the funds for ineligible business purposes; PPP funds can only be used to cover specific expenses such as payroll, interest on mortgage obligations, rent, or utilities.|
|Fraudulent Loan Forgiveness Certification||Submitting a false certification form for loan forgiveness is illegal and can lead to prosecution.|
|Misrepresenting or Concealing Information during a PPP Audit or Investigation||Companies must provide accurate information during audits and investigations related to the receipt of PPP loan funds, and avoid making misrepresentations or concealing information.|
Take Action if Your Company is Alleged to Have Committed PPP Loan Fraud
Companies that receive allegations of PPP loan fraud must act swiftly and engage experienced legal counsel immediately. Oberheiden P.C. has a team of qualified federal defense attorneys who can help protect business owners and their reputation. It is crucial to obtain legal advice to mitigate the risk of prosecution, safeguard executives and business owners from criminal fines, terms in prison, and protect a company’s legal rights.
Conclusion: Act Proactively to Stay Protected
The Paycheck Protection Program (PPP) offers a lifeline for small and medium-sized businesses beleaguered by the COVID-19 pandemic. However, fraudsters taking advantage of the system pose a significant threat. Companies that committed fraudulent acts relating to PPP run the risk of fierce prosecution and heavy scrutiny from federal authorities. Firms must enlist the services of experienced federal counsel to mitigate the risks associated with prosecution, criminal fines, and prison terms, all the while safeguarding their legal rights and reputation.