White Collar Crime Attorney: Why You Need One for COVID Loan Fraud.

The White Collar Criminal Defense Team at Spodek Law Group is available to assess your case and discuss how we can defend you against allegations of COVID loan fraud. Some common reasons for needing a white collar defense attorney for a COVID loan fraud allegation include:

• The legal complexities of newly enacted federal loan programs, and the need to understand how their requirements apply to your specific circumstances.
• The federal government’s burden of proving your intent and knowledge of the alleged fraud, and the need to challenge the government’s proof of such intent or knowledge.
• The need to make informed strategic choices about your defense, such as when to challenge the federal government’s case, when to negotiate a favorable settlement, and how to best prepare for a potential criminal trial, in light of both criminal and collateral consequences.

What Is COVID Loan Fraud?

COVID loan fraud generally refers to intentional falsification or misrepresentation to obtain funds from federal emergency loan programs. Although funded by the federal government, these loans were meant to provide aid to affected businesses and families. While federal authorities are not necessarily investigating you because you made an error or a mistake, in a fraud case, federal law enforcement will attempt to show you knowingly and illegally obtained federal funds. This includes providing forged signatures, false claims about your company’s needs and employees, and using funds for non-permitted purposes.

What Programs Are Investigated for COVID Fraud?

Several programs are subject to COVID fraud investigations. These include:

• Paycheck Protection Program (PPP) Loans,
• Economic Injury Disaster Loan (EIDL) Program,
• Grants such as the Restaurant Revitalization Fund (RRF), and loans such as PPP and EIDL.

What Are the Potential Penalties for COVID Loan Fraud?

The potential criminal penalties for COVID loan fraud are substantial. They can include significant fines, probation, and federal imprisonment. The potential civil penalties can be recouping the funds, treble damages, and additional fines. In some cases, additional collateral consequences can include:

• Exclusion from future federal contracts,
• Program disbarment,
• Reputational harm.

Cases can begin at the federal level with the DOJ, FBI, HHS Office of Inspector General, or IRS.

Why Do You Need a White Collar Crime Attorney for a COVID Loan Fraud Case?

Federal COVID loan fraud cases are now an established area of federal enforcement, and they require an experienced white collar defense attorney. can build a defense for our clients that is specifically geared to combat those strategies.

Our attorneys can defend you against a variety of charges, such as:

• Bank fraud,
• Wire fraud,
• Conspiracy,
• Falsifying or concealing a material fact,
• Obstruction of justice,
• Misuse of emergency pandemic funds.

How Do I Find a White Collar Crime Attorney to Represent Me in a COVID Loan Fraud Case?

Finding the best white collar criminal defense attorney requires focusing on a few key factors:

• Proven results in successful outcomes,
• Deep knowledge and experience in your specific area of federal law,
• A personalized and strategic approach to your case.

At Spodek Law Group, we pride ourselves on these qualities. We take a comprehensive approach to every case, starting with a personalized and confidential defense strategy and working towards a favorable outcome for you.

What Should You Do When a Federal Agent Contacts You About a COVID Loan?

A federal investigation can begin with an initial contact from an investigating agent, who may state that he/she is aware of your loan application, or may have information showing that you provided false information in your application. You may also receive a grand jury subpoena, target letter, or other communication from federal law enforcement.

If you receive a target letter, you should be cautious. The letter may request voluntary testimony to a grand jury, and it may state that federal prosecutors are willing to interview you before an indictment. However, you cannot assume that negotiating a favorable outcome means that you won’t be indicted, and you must remember that any statements you make during the grand jury proceeding will be used against you.

While target letters may state that prosecutors are open to immunity agreements and plea deals, investigating agents cannot ordinarily bind federal prosecutors. At a target letter stage, it is important to immediately engage an experienced white-collar defense attorney who can provide strategic advice and who can begin working to protect your future interests.

If an agent or prosecutor contacts you for an interview, you may decline to participate and request that your attorney be present, but you generally do not have a constitutional right to have an attorney present during a voluntary, noncustodial interview. While Miranda warnings generally apply only to custodial interrogations, you may decline to answer questions during a voluntary interview. Your attorney can advise you on the appropriate way to respond to an agent’s request for an interview and your attorney may represent you in the interview if necessary.

If you received a grand-jury subpoena, you must promptly address the compelled investigative process, including by evaluating whether to assert privileges, seek to modify or quash the subpoena, or otherwise respond. Your white-collar defense attorney will be able to protect your interests throughout this process, and can begin building a viable defense strategy.

How Does a PPP Allegation Become a Federal Fraud Case?

The Paycheck Protection Program (PPP) was created by Congress under the authority of the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020. The program was intended to provide government-backed loans to qualifying businesses and individuals, ensuring that the funds would help small businesses continue to pay their employees and other business expenses while remaining open during the economic impacts of the COVID-19 pandemic.

The potential for fraud in this scenario is clear. Applicants who lied, forged signatures, or inflated their employee’s compensation to get federal funds they didn’t need or didn’t qualify for are committing crimes. Applicants can face allegations that are based on either the information provided in their initial loan application or information provided in their certification for loan forgiveness. Competitors, whistleblowers, and other individuals can all identify concerns such as bank fraud or making false statements to the Small Business Administration (SBA), which are among several federal charges that apply to the program.

Federal criminal convictions require proof beyond a reasonable doubt that you committed a statutory federal offense. In cases involving COVID loan fraud, the federal authorities have the burden to show that you knowingly obtained funds from the federal government through material misrepresentations, such as forged signatures, false information about your company’s needs and employee compensation, or misusing the funds for non-approved business purposes.

Many federal fraud cases center around whether inaccurate information provided by an applicant was knowingly and intentionally submitted or if the information was provided as a result of an honest mistake. Because of this, one of the main goals of the prosecution is to demonstrate that the applicant’s misrepresentations meet the necessary standard of intent.

The government’s ability to prosecute cases involving federal loans is based on the specific statute charged and the facts that establish a federal nexus. Federal jurisdiction depends on the statute charged and the facts establishing its federal jurisdictional element, which may include a matter within federal governmental jurisdiction, an interstate wire, or conduct involving a financial institution. If these factors are present, the federal government can bring a variety of charges including bank fraud, wire fraud, and making false statements, among others.

Which COVID-loan rule version governs an application, expenditure, or forgiveness certification?

With the rules having changed multiple times in a very short period, along with different versions of the rules having different requirements, the answer to that question is complex. When it comes to determining whether you have the grounds for an allegation of COVID loan fraud, it depends on whether the application is the concern, the way you used the funds, or the certification you made to get the loan forgiven. As a result, the version of the rules that were in effect at that time will apply. In general, later rule versions apply to later-received funds, and this is an aspect that requires careful consideration when deciding how the federal government will try to prosecute a given case. The initial PPP rules for businesses required that the loan application be limited to a total of 2.5 times their average monthly payroll costs from the preceding 12 months, with a cap of $10 million. Initial PPP rules also excluded any employee compensation that exceeded $100,000 in annual compensation. When the Treasury Department provided the initial guidance for forgiveness, they established that at least 75 percent of the PPP funds were to be spent on payroll costs. Some other allowable expenses to help business loan recipients survive the financial impact of the economic fallout of the pandemic included utilities, rent, mortgage interest, and more. As these initial rules became outdated and the government looked to provide additional assistance through subsequent loan and grant programs, the rules began to change. To avoid confusion, to determine what rules govern a PPP loan application, expenditure, or forgiveness certification, the rules that were in effect at that time will apply. This is particularly important when it comes to application fraud versus forgiveness fraud, as these involve fundamentally different types of representations. Application fraud involves the representations a borrower makes when applying for a loan. Forgiveness fraud involves the representations the borrower makes to the government when seeking to have their loan forgiven. Each requires the federal government to prove its case through different means, and thus a very different defense strategy is needed for each one. For application fraud, the government must show that the borrower lied about what they were entitled to. For forgiveness fraud, the government must show that the borrower lied about how the loan funds were spent.

How Can Counsel Test Intent, Financial Loss, and the Consequences of a COVID-Loan Fraud Case?

White-collar crimes like COVID loan fraud are based on facts, and the facts are based on evidence. The evidence used in federal white-collar cases is often voluminous and complicated. Emails, texts, bank records, participant testimony, and other evidence all play a role in proving or disproving the federal government’s case. When you engage our White Collar Criminal Defense Team at Spodek Law Group, our attorneys will meticulously examine the evidence to test the government’s theories on issues such as intent, financial loss, and other facts relevant to the case at hand.

In the event that a defendant is found guilty, the federal sentencing judge looks to both 18 U.S.C. § 3553(a) and the U.S. Sentencing Guidelines for determining the sentence in a given case. Although the Guidelines are only advisory, they are nonetheless very important when it comes to federal fraud sentencing. The Guidelines identify multiple relevant factors that federal sentencing judges must consider. In a fraud case, these factors often include:

• Amount of financial loss to the victim,
• Recouping of funds,
• Restitution,
• The defendant’s role in the alleged fraud,
• Prior crimes committed,
• Crimes planned,
• Additional circumstances related to the crime,
• And other pertinent factors.

How to avoid the collateral consequences of a federal COVID loan fraud allegation

Even though a criminal accusation alone may not guarantee a conviction, fraud allegations can also lead to additional collateral consequences beyond criminal penalties. These include professional license revocations, immigration status, employment opportunities, and your reputation. All of these are consequences that can be avoided by engaging an experienced white collar defense attorney who can defend you.

Our firm’s White Collar Criminal Defense Team will build a defense strategy specifically for your case, and we will fight for a favorable outcome.

Get Advice on Your Situation

If you want someone to look at the specifics of your case, Spodek Law Group handles federal criminal defense nationwide from New York and Los Angeles. The firm has been practicing since 1976 and its motto is simple: we owe loyalty to only you. Call 888 348 8028.