Tucson PPP – SBA – EIDL Loan Fraud Lawyers

Person in suit with money

The COVID-19 pandemic brought unprecedented government assistance to small businesses across America. In Tucson, Arizona, business owners eagerly applied for loans and grants from the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) program administered by the Small Business Administration (SBA) . While these programs provided a lifeline for many legitimate businesses impacted by the pandemic, some individuals took advantage of the rushed loan process to commit fraud and embezzle millions of dollars. Now, as the dust settles and the SBA reviews loan applications, many Tucson business owners are finding themselves accused of PPP or EIDL fraud. If you are facing civil or criminal charges related to an SBA loan, it is critical to consult an experienced white collar defense attorney as soon as possible.

Overview of PPP and EIDL Programs

The Coronavirus Aid, Relief, and Economic Security (CARES) Act established the PPP and expanded the existing EIDL program in March 2020. The PPP provided potentially forgivable loans to help cover payroll, rent, utilities and other expenses during COVID-19 shutdowns and slowdowns. The long-standing EIDL program offered low-interest loans and grants to businesses affected by declared disasters. In 2020, EIDL expanded to provide loans specifically for losses caused by the pandemic. The SBA approved over 11 million PPP loans totaling nearly $800 billion nationwide. In Arizona, over 114,000 PPP loans worth $14.7 billion were distributed. The EIDL program loaned $197 billion as of January 2021, plus $20 billion in grants. With so much money flowing so quickly, oversight and verification understandably took a backseat to getting funds into the hands of struggling business owners. However, now the SBA is circling back to audit PPP and EIDL loans for potential fraud.

Common Types of Alleged PPP and EIDL Fraud

In the haste to distribute pandemic relief funds, the SBA’s internal controls were weakened or bypassed completely. This created an environment ripe for abuse by unscrupulous applicants. Some common fraudulent activities alleged in PPP and EIDL cases include:

Submitting multiple loan applications with fake, stolen or synthetic identities
Using fabricated documents like payroll records, tax forms or identity documents
Lying on applications about number of employees, payroll expenses, cost of goods sold or other figures to maximize loan amount
Applying for and receiving duplicate PPP and EIDL loans for the same business expenses
Using PPP funds for personal purchases instead of approved business expenses like payroll
Failing to disclose criminal history or pending charges to obtain EIDL loans
Colluding with lenders or insiders to facilitate fraudulent loans

Some indicators of potential fraud according to the SBA Office of Inspector General include:

Businesses formed after February 2020 receiving PPP loans
Multiple businesses operating from a residential address
Applicants opening bank accounts immediately before applying for loans
Businesses that never filed payroll tax forms suddenly reporting large payroll numbers

Consequences of PPP or EIDL Loan Fraud

Those caught committing fraud in PPP or EIDL loan applications face severe civil and criminal penalties. On the civil side, the SBA may sue borrowers to recover loan funds obtained through fraudulent representations. You could be ordered to repay the full loan amount, plus interest, fees and triple damages in some cases.Criminal prosecution is also a real danger, since PPP and EIDL fraud violates federal laws against wire fraud, bank fraud and making false statements. Those convicted could face:

Up to 30 years in federal prison
Massive fines up to $1 million
Forfeiture of assets obtained with fraudulent loan proceeds
Restitution to the government
5 years probation

Defendants in some of the first PPP fraud cases have already received stiff sentences, including 30 months, 57 months and over 5 years in federal prison.

Finding an Experienced SBA Fraud Lawyer

If you are contacted by SBA investigators or charged criminally for alleged PPP or EIDL fraud, consulting an attorney should be your first call. An experienced federal white collar defense lawyer can carefully analyze the facts of your case and determine the best defense strategy. For example, we may be able to argue:

You acted in good faith when applying for pandemic relief loans
Any incorrect information was an honest mistake, not intentional deception
You were entitled to the full loan amount based on your business circumstances
You used the funds for legitimate purposes

In civil SBA audits and lawsuits, an attorney can negotiate with the government to minimize penalties and avoid criminal prosecution. If criminal charges cannot be avoided, we will aggressively defend your rights in court and seek the best possible outcome under the circumstances.Every case is different. To discuss your situation in a free and confidential consultation, contact the Tucson white collar defense attorneys at [Firm Name] by calling [Phone] or reaching out online. With an impressive record of success defending complex fraud allegations, we have the experience to protect your interests in SBA loan investigations and prosecutions. Don’t wait to seek experienced legal counsel – call our office today.