CALIFORNIA CRIMINAL LAWYERS

Protect Yourself: DOJ Investigators Are Hot on the Trail of PPP Loan Fraud

When the Paycheck Protection Program (PPP) was first launched, many businesses regarded it as a lifeline to help them stay afloat during the COVID-19 crisis. The program was designed to provide forgivable loans that backed by the federal government for companies that struggled to pay their workers. Unfortunately, the PPP loan also became an opportunity for many scammers to take advantage of the system and misappropriate funds. Due to the scale of fraud involved, the Department of Justice (DOJ) is actively investigating PPP loan fraud and prosecuting those involved.

If your company is under investigation for PPP loan fraud, it is vital to seek legal guidance from a PPP loan fraud attorney. Here’s how you can prepare for the DOJ’s investigations.

The DOJ Is Focused on Holding Companies and Individuals Accountable for PPP Loan Fraud

The DOJ is resolute in going after entities that wrongfully issued fraudulent loan applications and benefited from the PPP money. This act of criminality is costly to the economy; hence, the DOJ is committed to prosecuting suspected fraudsters and charging them with various federal offenses.

The DOJ Is Actively Pursuing Charges in Numerous PPP Loan Fraud Cases

The DOJ is not turning a blind eye to any PPP loan fraud case. Several fraudsters have already been identified and charged with submitting false loan applications, creating shell companies to receive funds or misusing the PPP loans. The alleged fraudulent activities resulted in a range of pre-existing federal offenses such as false claims, wire or bank fraud, and tax evasion.

The DOJ Is Collaborating with Other Federal Law Enforcement Agencies to Combat PPP Loan Fraud

The DOJ is working alongside various federal law enforcement agencies, such as the FBI, Federal Deposit Insurance Corporation Office of the Inspector General (FDIC-OIG), Internal Revenue Service Criminal Investigations (IRS-CI), United States Postal Service, and Small Business Administration Office of Inspector General (SBA-OIG), to investigate and identify PPP loan fraud activities.

PPP Loan Fraud Defense Strategies

PPP loan fraud charges are severe and can have long-lasting consequences. Therefore, it’s crucial to take a strategic approach when facing DOJ investigations. Here are some tips for building a robust defense:

Get Experienced Legal Help: Hiring an experienced PPP fraud defense attorney is critical in winning a PPP loan fraud defense case.

Start Gathering Evidence and Preparing Your Defense: Gather and evaluate evidence that will help your defense attorneys build a comprehensive defense.

Be Honest: Honest and transparent communication with your lawyers is vital in building a solid defense against the DOJ’s investigation.

Defenses Against PPP Loan Fraud Investigations

PPP loan fraud allegations can be fought in various ways. Knowing what you’re up against can help you focus on defending yourself against accusations of PPP loan fraud. Below are some defenses that can be used to counter DOJ’s PPP loan fraud charges.

Paycheck Protection Program Compliance: If your company can prove that it obtained PPP loans in compliance with the program’s terms and used the loan accordingly, it can serve as a strong defense.

Lack of Fraudulent Intent: Your defense attorney can argue that the PPP loan was obtained inadvertently, and that the lack of intent to defraud can serve as a defense.

Possible Charges Incurred in the Course of DOJ’s PPP Loan Fraud Investigations

The CARES Act did not spell out the penalties for PPP loan fraud. However, fraudulent activities can trigger criminal and civil charges under pre-existing federal statutes. Here are some federal offenses you face when targeted in DOJ’s PPP loan fraud investigation:

making false statements to the Small Business Administration (SBA),

making false statements to a Federal Deposit Insurance Corporation (FDIC) insured bank,

bank fraud,

wire fraud,

aggravated identity theft,

tax evasion,

making false statements to federal agents,

conspiracy, and

false claims act violations.

In Conclusion

PPP loan fraud is a severe matter that can lead to dire consequences. If you get targeted in the DOJ’s PPP loan fraud investigation, hiring a knowledgeable PPP loan fraud defense attorney is crucial. A well-crafted defense strategy can increase your chances of winning the case and help you escape severe penalties.