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 You Must Know When Facing a DOJ Investigation for PPP Loan Fraud
Amidst the COVID-19 pandemic, the government established the Paycheck Protection Program (PPP) to help businesses struggling to keep afloat financially. PPP provided federally-backed loans, which are forgivable when used appropriately. However, news of ineligible businesses and persons getting PPP funds, and businesses using the money inappropriately, have made PPP a hotbed of fraud. Consequently, the United States Department of Justice (DOJ) has launched several investigations into businesses and individuals suspected of misusing PPP funds or submitting fraudulent PPP loan applications.
As a business facing a DOJ investigation, your company, executives, and yourself are at risk of facing far-reaching consequences. Below is what you need to know about facing a DOJ investigation for PPP loan fraud.
The DOJ is Aggressively Targeting Businesses and Individuals involved in PPP Loan Fraud
The DOJ is committed to bringing to justice all individuals and businesses involved in unlawfully taking advantage of PPP loans. The DOJ is seeking to protect the program, which has become vital support for Americans facing economic difficulties during the pandemic. The DOJ has issued a stern message to those defrauding the system and taken measures to ensure the culprits face the law.
The DOJ is Actively Pursuing PPP Loan Fraud Cases
The DOJ is not bluffing when it comes to bringing to book all individuals and businesses that breach the law related to PPP loans. The DOJ has already filed charges in several PPP loan fraud cases. These charges range from using PPP loan funds to obtain multiple loans or pay extravagant expenses and falsifying payroll and shell companies to get PPP loans. Therefore, the possibility of facing a DOJ investigation for PPP loan fraud is a real and immediate threat.
Collaboration with Other Federal Law Enforcement Agencies
The DOJ is not alone in fighting suspicious activities within the PPP program. Other federal organizations have partnered with the DOJ to identify and prosecute individuals and businesses that fail to follow PPP-related laws. These organizations include the FBI, FDIC-OIG, IRS-CI, and SBA-OIG.
Potential Defenses During DOJ PPP Loan Fraud Investigations
A DOJ investigation regarding PPP loan fraud is serious. However, it is crucial to remember that it is your right to defend yourself against the charges brought before you. Therefore, the following are some of the possible defenses for individuals and businesses dealing with DOJ PPP loan fraud investigations.
Paycheck Protection Program Compliance
Demonstrating compliance with PPP terms is usually the first line of defense for most individuals and businesses facing forgery accusations. To stand a good chance, you need to demonstrate that your PPP loan application met all the program’s legal requirements. Additionally, you must have appropriately documented all the PPP funds’ utilization and established a unique account for the PPP money. Vigilance is essential when providing information to the DOJ because any information shared unknowingly or involuntarily may turn against you ultimately, resulting in higher exposure to prosecution for PPP loan fraud.
Lack of Intent to Defraud
Intentional fraud is the primary criminal responsibility under federal law. Therefore, this defense strategy might increase your chances of proving your case. However, unintentional fraud can result in civil charges under False Claims Act and others, leading to hefty fines, program ineligibility, and other substantial penalties.
Possible Charges in PPP Loan Fraud Cases
Even though the CARES Act does not explicitly state penal provisions regarding PPP loan fraud, using PPP to commit fraud is subject to civil and criminal charges under several existing federal statutes, including:
РMaking False Statements to the Small Business Administration (SBA) (18 U.S.C. § 1014)
РBank Fraud (18 U.S.C. § 1344)
РMaking False Statements to an FDIC-Insured Bank (18 U.S.C. § 1014)
РWire Fraud (18 U.S.C. § 1343)
РAggravated Identity Theft (18 U.S.C. § 1028A)
РTax Evasion (26 U.S.C. § 7201)
РMaking False Statements to Federal Agents (18 U.S.C. § 1001)
РConspiracy (18 U.S.C. § 371 and 18 U.S.C. § 1349)
РFalse Claims Act Violations (31 U.S.C. §§ 3729 – 3733)
Get Legal Representation Immediately
If you are facing legal action for PPP loan fraud, seek legal representation immediately. Todd Spodek and his team can help you build an effective defense, defend your legal rights, and determine a constructive way forward. They will examine the charges and gather relevant evidence, evaluate your case to find its strengths and weaknesses, identify potential flaws, construct a legal strategy that works for you, and help achieve favorable outcomes in your federal PPP loan fraud case. Contact Todd Spodek today for a consultation or book your appointment online.
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