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DOJ Investigations into PPP Loan Fraud: Protecting Your Business

As the COVID-19 pandemic started in 2020, businesses across the United States were financially challenged as lockdowns and social distancing regulations took effect. In response to the economic repercussions of the pandemic, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020. The act created the Paycheck Protection Program (PPP), which provides small businesses and other organizations with forgivable loans to assist in paying their employees‚Äô salaries and other business expenses. Nevertheless, it became evident that the PPP was vulnerable to fraudulent activity, leading to the U.S. Department of Justice’s (DOJ) increase in investigating cases regarding potentially fraudulent PPP loan proceeds by businesses across the country.

In light of DOJ investigations for PPP loan fraud, it is vital to understand what this entails for businesses. The DOJ is treating PPP loan fraud as severe criminal activity, which may lead to severe consequences, including convictions. Therefore, it’s essential to have experienced legal representation such as Spodek Law Group that specializes in defending clients facing diverse federal charges.

PPP Loan Fraud: The DOJ’s Aggressive Pursuit

The widespread exposure of fraudulent activity targeting the PPP led to the DOJ aggressively pursuing criminal charges against all sorts of PPP loan fraud. According to a recent DOJ press release, it is committed to curbing PPP fraudsters who take advantage of eligible candidates struggling financially. Furthermore, the DOJ has already made numerous filings involving PPP loan fraud cases. These fraud cases include paying lavish personal expenses with PPP funds, using shell companies and falsifying payroll information to obtain PPP loans, and attempting to obtain multiple PPP loans.

Collaboration Between DOJ and Other Federal Law Enforcement Agencies

The DOJ, working closely with other federal law enforcement agencies, is investigating PPP loan fraud, including the U.S. Small Business Administration Office of Inspector General (SBA-OIG), Federal Deposit Insurance Corporation Office of Inspector General (FDIC-OIG), Federal Bureau of Investigation (FBI), and Internal Revenue Service Criminal Investigations (IRS-CI). This collaborative effort strengthens the DOJ’s credibility and capacity to detect and prosecute PPP loan fraud cases.

Potential Defenses to Allegations of PPP Loan Fraud

There are several potential defenses to PPP loan fraud allegations. Companies and individuals can assert program compliance with PPP, lack of intent to defraud, and additional defenses. Having an experienced legal team can help identify the defense strategy to adopt for the specific charges against your business.

Federal PPP Loan Fraud Charges to Watch Out For

DOJ PPP loan fraud charges include making false statements to the Small Business Administration (SBA), bank fraud, wire fraud, making false statements to an FDIC-insured bank, aggravated identity theft, tax evasion, making false statements to federal agents, and conspiracy.

Table: Possible Federal PPP Loan Fraud Charges

|Federal PPP Loan Fraud Charges |
|—|
|False statements to the Small Business Administration (SBA) |
|Bank fraud |
|Wire fraud |
|False statements to an FDIC-insured bank |
|Aggravated identity theft |
|Tax evasion |
|False statements to federal agents |
|Conspiracy|

Final Thoughts

PPP loan fraud investigations by the DOJ are a serious issue that all businesses that obtained PPP loan funds should be aware of. With a proven track record of success in defending clients facing diverse federal charges related to PPP loan fraud, Spodek Law Group is ideally suited to provide actionable strategies for protecting your business against federal charges. Therefore, if you or your business is currently facing DOJ investigations for PPP loan fraud, contact Spodek Law Group today to schedule a consultation.