The Paycheck Protection Program (PPP) was introduced in response to the economic challenges caused by the COVID-19 pandemic. With the onset of the COVID-19 pandemic, the United States government put into place numerous methods for individuals and businesses to obtain relief loans in order to offset devastating losses due to long-lasting shutdowns. Aimed at helping small businesses, the PPP provided forgivable loans to eligible businesses to cover payroll and other expenses. Unfortunately, the process and qualifications to obtain SBA Loans by way of EIDL and PPP applications are vague, vast, and tedious. Many individuals and companies hurried these applications along without the assistance of an accountant or lawyer, and many of those applications were subsequently approved by the government. However, in recent months, federal agents, prosecutors, and IRS officials have now scrutinized these applications more carefully, and have begun charging many individuals with committing PPP fraud. Since its creation, the CARES Act has been blamed for creating opportunities for possible fraud. As a result, and because billions of dollars were disbursed with little oversight, many loan recipients will be investigated by federal authorities for potential fraud.
PPP fraud refers to the illegal schemes devised by individuals or organizations to exploit the Paycheck Protection Program for personal gain. It involves intentionally providing false information, misusing funds, or creating fraudulent businesses to secure PPP loans. PPP fraud undermines the program's purpose, deprives legitimate businesses of assistance, and diverts taxpayer dollars into the hands of fraudsters.
According to media outlets, the Department of justice has now charged individuals with committing bank fraud, wire fraud, and money laundering as it relates to these CARES Act loans, totaling some $175 million dollars. Thus far, the government has honed in on individuals and companies who have made multiple loan applications, sometimes on behalf of others in exchange for a percentage of the money that they ultimately recover. This has been referred to as “clone loans” and “loan stacking.” The government has also looked at material misrepresentations within loan applications, particularly as it relates to a company’s purported loss of income during the time period which the loan sought to offset. Lastly, the government has honed in on improper use of loan money, which is typically suspected when individuals use these monies to pay off recent personal expenses or other debts.
Being charged with CARES Act fraud as it relates to an SBA, PPP, or EIDL loan is complex and requires meticulous defense. As stated, in its efforts to provide relief during COVID-19, the government created fast and loose regulations concerning these applications and has now zeroed in on people who have intentionally taken advantage of the system and even innocent individuals who they nevertheless suspect of doing the same. It is critical that, if you are being investigated by way of a federal subpoena, you hire an experienced defense attorney to organize your records, consult with a forensic accountant, and respond appropriately. We at the Law Offices of Jason Goldman can help you.
Federal fraud attorneys and lawyers are instrumental in the fight against PPP fraud. Their expertise in white-collar crime, federal law, and the intricacies of fraud investigations enables them to play a vital role in bringing perpetrators to justice.
If you are accused of federal fraud charges related to the paycheck protection program (PPP), it is imperative that you hire a former prosecutor and prominent criminal defense attorney who has dealt with these offenses on both sides of the courtroom. The steps your defense attorney takes, by way of investigation and creative advocacy, will increase your chances of successfully walking away from these serious accusations and shape the rest of your life.
The sooner you put your case in the hands of an experienced criminal defense lawyer, the more opportunity you will have to work toward a favorable outcome.