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DOJ’s Crusade Against PPP Loan Fraud: Know What’s at Stake
The COVID-19 pandemic has brought about numerous challenges to businesses, including paying their employees. In response, the US government established the Paycheck Protection Program (PPP) to provide financial assistance. However, fraud and misuse of funds have plagued the program, leading to investigations by the US Department of Justice (DOJ).
Facing a DOJ investigation for PPP loan fraud is a serious matter that could lead to severe consequences. The DOJ is committed to prosecuting individuals and businesses suspected of submitting fraudulent loan applications and misusing PPP funds. Below are some essential things to know about DOJ investigations into PPP loan fraud, how they work, and what potential consequences you may face.
The DOJ is on the Rampage against PPP Loan Fraud
The DOJ is determined to bring to book individuals and businesses suspected of using the PPP for fraudulent purposes. Due to the adverse cost of PPP fraud and the impact it has on taxpayers, the DOJ is working vigorously in pursuing an extensive range of federal offenses.
Numerous PPP Loan Fraud Cases are Under Scrutiny
Currently, the DOJ has filed charges in several PPP loan fraud cases. The common offenses investigated are creating shell companies and falsifying payroll data to secure PPP loans, diverting PPP loan funds to pay for personal expenses, and attempting to obtain multiple PPP loans. The DOJ also targets individuals and businesses suspected of filing fraudulent PPP loan forgiveness certifications.
Multi-agency Collaborations in the Fight against PPP Loan Fraud
The DOJ is not acting alone in the fight against fraud in the Paycheck Protection Program. The agency collaborates with multiple federal agencies, 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). These agencies are equally committed to identifying and prosecuting individuals and companies that have unlawfully taken advantage of the PPP.
Potential Defenses against PPP Loan Fraud Investigations
Various defenses could help individuals and businesses respond to DOJ investigations into PPP loan fraud. Some of the common defenses include demonstrating compliance with the program’s terms and showing a lack of intent to defraud. However, it is crucial to work hand in hand with an experienced attorney who can navigate the complexities of a federal investigation.
PPP Loan Fraud Investigations: Potential Charges
PPP loan fraud can trigger both civil and criminal charges, a substantial cost in federal statutes, including making false statements to the Small Business Administration (SBA), bank fraud, wire fraud, tax evasion, conspiracy, among others. It’s vitally important to understand all potential charges and penalties associated with each statute to mount a powerful defense.
Conclusion
Facing a DOJ investigation for PPP loan fraud is an alarming situation that could have severe consequences on you and your business. The DOJ is aggressive and determined to prosecute individuals and businesses engaging in fraudulent activities in the Paycheck Protection Program. It is essential to work with an experienced attorney knowledgeable in handling DOJ investigations throughout the process. The latter can mount an effective defense, leading to an acquittal or reduced charges.
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Potential Charges in PPP Loan Fraud Investigations
Making False Statements to the Small Business Administration (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)
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