CALIFORNIA CRIMINAL LAWYERS

Albuquerque PPP and EIDL Loan Fraud Lawyers

DOJ Investigates PPP Loan Fraud: Consequences and Defenses

The Paycheck Protection Program (PPP) was supposed to give a lifeline to businesses struggling due to the COVID-19 pandemic. However, fraudsters targeted the program, causing funds to be disbursed to those who were ineligible, which has left the U.S Department of Justice (DOJ) with no choice but to act. The DOJ is actively pursuing PPP loan fraud investigations, uncovering evidence, issuing criminal complaints, and pressing charges for federal offenses.

Facing a DOJ Investigation for PPP Loan Fraud

If your company is facing a DOJ investigation for PPP loan fraud, realize that the charges are severe, and the consequences can be dire. The DOJ is intent on prosecuting individuals and companies who they believe submitted fraudulent loan applications and misused PPP loan funds. The severity of the penalties will depend on the specific charges against you, but you could face significant fines, treble damages, and even imprisonment.

Potential Defenses for PPP Loan Fraud Allegations

Individuals and companies that receive allegations of PPP fraud can seek different defenses to ensure their safety. The first line of defense is compliance with the PPP’s terms. Providing evidence of the correct and legal use of PPP funds, the lawful receipt of a PPP loan, and the segregation of a PPP loan account will all work in your favor. When giving information to the DOJ, one needs to be cautious with responses.

Lack of intent to defraud is another potential defense that applies when individuals inadvertently obtained a PPP loan, though ineligible or used PPP funds incorrectly, submitted fraudulent forgiveness certification accidentally. With federal cases requiring defrauding intent to stick, evidence that there was none works in one’s favor.

Federal Statutes for PPP Loan Fraud Investigations

Federal PPP loan fraud investigations offer several pre-existing federal statute charges. Some potential charges that may come with PPP loan fraud investigations include conspiracy, making false statements to an FDIC-insured bank, and tax evasion. Others include making false statements to Federal agents, bank fraud, wire fraud, aggravated identity theft, among several other charges.

DOJ’s Response to PPP Loan Fraud

The DOJ’s response to PPP loan fraud has been swift, and it has committed itself to identifying and bringing the culprits to justice. The department has charged several individuals with creating shell companies and falsifying payroll information to acquire PPP loans. Several individuals have unwarrantedly acquired several loans, with some even using PPP loan funds to pay for lavish personal indulgences. Wire fraud has been the DOJ’s weapon of choice in several PPP-related cases, targeting those attempting to fraudulently obtain loans on behalf of companies they do not own.

Federal PPP Loan Fraud Investigations

The DOJ is not the only federal agency fighting PPP fraud. Various agencies, committed to bringing fraudsters to justice, work with the DOJ. These agencies include FBI, IRS-CI, SBA-OIG, and FDIC-OIG.

Conclusion

PPP loan fraud allegations evoke severe consequences, thus requiring skilled legal representation based on defending evidence. Compliance with the PPP terms is the first line of defense, followed by no fraudulent intent to stick. With different federal statutes applicable, the DOJ continues to bring fraudsters to justice.

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Potential Charges in Federal PPP Loan Fraud Investigations

| Charge | Federal Statute |
| ————- |:————-:|
| Making False Statements to the SBA | 18 U.S.C. § 1014 |
| Making False Statements to an FDIC-Insured Bank | 18 U.S.C. § 1014 |
| Bank Fraud | 18 U.S.C. § 1344 |
| Wire Fraud | 18 U.S.C. § 1343 |
| Aggravated Identity Theft | 18 U.S.C. § 1028A |
| Tax Evasion | 26 U.S.C. § 7201 |
| Making False Statements to Federal Agents | 18 U.S.C. § 1001 |
| Conspiracy | 18 U.S.C. § 371 and 18 U.S.C. § 1349 |
| Attempt | 18 U.S.C. § 1349 |
| False Claims Act Violations | 31 U.S.C. §§ 3729 – 3733 |