Free Consultations & We're Available 24/7
WE'RE A BOUTIQUE LAW FIRM. YOU WORK WITH ONE OF OUR SENIOR ATTORNEYS PERSONALLY.
WE'RE ONE OF NEW YORK'S OLDEST CRIMINAL DEFENSE LAW FIRMS. TRUST 50 YEARS OF EXPERIENCE.
WE SERVICE CLIENTS NATIONWIDE, WITH OFFICES IN LOS ANGELES AND NYC.
What Businesses Facing U.S. Department of Justice (DOJ) Investigation for PPP Loan Fraud Should Know
The Paycheck Protection Program (PPP) was designed to provide much-needed financial relief for businesses struggling during the COVID-19 pandemic. However, the program soon became vulnerable to fraud, allowing ineligible parties to submit false applications and use the funds for unauthorized purposes.
The DOJ is taking a firm stance against PPP loan fraud and is actively seeking sufficient evidence to prosecute businesses and individuals for a range of federal offenses. If your company is currently facing a DOJ investigation for PPP loan fraud, there are several essential things to know:
The DOJ is targeting companies and individuals that have submitted fraudulent loan applications, falsified payroll information to obtain loans, submitted fraudulent certifications for PPP loan forgiveness, or misused PPP funds for personal expenses. The economic impact of the COVID-19 pandemic and the importance of PPP funds make this a matter that the DOJ is taking very seriously. According to a recent press release, “Our office will be aggressive in targeting anyone who defrauds this critical program.”
The DOJ has already filed several criminal complaints resulting from PPP loan fraud investigations, including the creation of shell companies, falsification of payroll expenses to obtain PPP loans, and attempts to obtain multiple PPP loans. These standards are not theoretical, and the DOJ is taking action in cases of PPP loan fraud.
The DOJ is collaborating with other federal agencies in the fight against PPP loan fraud. It is essential to identify and prosecute individuals and companies unlawfully taking advantage of federally-backed, forgivable loans offered under the PPP. Some of the other agencies working on this issue include 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).
PPP loan fraud accusations can have serious consequences for business owners and executives. Companies with expertise in PPP loan fraud cases, like Todd Spodek Law, have knowledge of the current defenses available to companies facing DOJ investigation. Specific defenses may apply based on the charges under the comprehensive statutes, including the following:
Paycheck Protection Program Compliance – Providing proof of compliance may be the first defense for demonstrating that your company obtained a PPP loan lawfully, established a segregated PPP loan account, and documented all appropriate uses of the funds.
Lack of Intent to Defraud – Fraud accusations that lack intent may provide a defense against the charges.
Although the CARES Act that created the Paycheck Protection Program does not contain penal provisions for PPP loan fraud, such fraud can trigger criminal charges under several existing federal statutes, including:
The DOJ’s investigation for PPP loan fraud is a serious matter that should concern businesses, company owners, executives, and others. Even though there are defenses available, companies that are found guilty of such accusations may face severe consequences. It is essential to own and remedy mistakes, regardless of the defense presented.
Very diligent, organized associates; got my case dismissed. Hard working attorneys who can put up with your anxiousness. I was accused of robbing a gemstone dealer. Definitely A law group that lays out all possible options and alternative routes. Recommended for sure.
- ROBIN, GUN CHARGES ROBIN
CALIFORNIA CRIMINAL DEFENSE ATTORNEYS