CALIFORNIA CRIMINAL LAWYERS

Oklahoma City PPP and EIDL Loan Fraud Lawyers

The COVID-19 pandemic has been doing a number on businesses around the globe. To lessen the impact on the country’s businesses, the American government created the Paycheck Protection Program (PPP). It was designed to provide support to small companies so they can continue to pay their employees during the time of crisis. Unfortunately, the PPP became a prime target for scammers. Although it was a beacon of hope to companies in trouble nationwide, it became a source of fraudulent activity, a lot of which went unnoticed. The Department of Justice (DOJ) has launched an investigation into PPP loan fraud cases. If individuals and companies under investigation are to weather this storm, they must know the consequences of this probe. In this article, we’ll lay out the details anyone facing a DOJ investigation into PPP loan fraud should keep in mind.

The DOJ Won’t Think Twice About Prosecuting PPP Loan Fraud Cases
The Department of Justice isn’t playing around. They will pursue and prosecute any individual or company found guilty of submitting false applications or misusing PPP loan funds. With a press statement released recently, the DOJ expressed its determination to charge anyone who acted in bad faith. The statement said, “The Paycheck Protection Program was designed to help Americans struggling with financial hardship during the pandemic. Our office will be aggressive in targeting anyone who defrauds this critical program.” Businesses and individuals who have misused the funds from PPP, be warned – you’re in serious trouble.

PPP Loan Fraud Investigations Are Booming
Several cases of fraud relating to the PPP have already come to the DOJ’s attention. In these cases, the DOJ has filed charges against the individuals and companies accused of falsely submitting applications or misusing the funds granted by the PPP loans. Offenses range from creating shell companies to covering expenses that personal accounts should pay for. Essentially, no offense is off the table. Anything that points to wrongdoing will be investigated, and as long as there’s enough evidence of fraudulent activities, the DOJ will stop at nothing to prosecute the offenders.

Federal Agencies Team-Up to Fight PPP Loan Fraud
The DOJ is far from alone in their pursuit of scammers. They’re working with other federal organizations such as the 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 collective efforts are working to identify offenders and prosecute the appropriate legal consequences under the PPP program.

What to Do if You’re Under Investigation for PPP Loan Fraud by the DOJ?
If individuals or businesses are under investigation by the DOJ for PPP loan fraud, they must know that they have legal rights. In order to make the most of these rights, they should work with a knowledgeable and experienced criminal defense attorney. The attorney can help them determine the course of action and guide them through the legal process. Here are two possible defenses to keep in mind:

1. Understand PPP Program Compliance
Businesses and individuals who received PPP loans can protect themselves by demonstrating their adherence to the program’s guidelines. As long as they have been following policies and have documents showing the use of PPP funds, then these records can serve as evidence. It’s essential to note, though, that individuals must be careful when providing information to the DOJ. Anything submitted that could be incriminating should be withheld.

2. Argue Lack of Intent to Defraud
In general, fraud requires the intent to deceive. That applies to PPP loan fraud cases, meaning the lack of intention to deceive can be used by individuals who did not mean to defraud the PPP program. It’s essential to seek legal advice to better understand this type of defense. There are many defenses specific to the Paycheck Protection Program that can challenge any allegations of PPP loan fraud being brought against individuals or companies.

Possible Federal Charges for PPP Loan Fraud
Individuals and businesses accused of PPP loan fraud can face several federal charges under existing federal statutes. While the PPP program doesn’t include penal provisions specifically for PPP loan fraud, many pre-existing federal statutes often become the basis for PPP-related prosecutions. These charges include:

Making False Statements to the Small Business Administration (SBA)
Under 18 U.S.C. § 1014, individuals and corporations who knowingly provide false information or reports to influence SBA actions can be found guilty of fraud. This includes lying on application forms or falsifying loan forgiveness certifications.

Making False Statements to an FDIC-Insured Bank
Companies or individuals providing false information to a financial institution insured by the Federal Deposit Insurance Corporation (FDIC) could face charges under 18 U.S.C. § 1014.

Bank Fraud
Companies and individuals can be convicted of bank fraud under 18 U.S.C. § 1344, in addition to false statements. This statute targets any scheme designed to defraud a financial institution or gain benefits under false or fraudulent pretenses.

Wire Fraud
Individuals and businesses involved in PPP loan fraud may also face federal wire fraud charges, which are criminalized under 18 U.S.C. § 1343. Penalties for this charge can be severe, and the use of the internet for fraudulent activities is criminalized.

Aggravated Identity Theft
18 U.S.C. § 1028A provides for increased penalties in identity theft cases that include identity theft used to secure fraudulent PPP loans.

Tax Evasion
Companies and individuals engaging in PPP loan fraud may face charges of tax evasion under 26 U.S.C. § 7201, such as failing to report income and payroll expenses in filings.

Making False Statements to Federal Agents
Individuals and businesses suspected of PPP loan fraud face charges of making false statements to federal agents during an investigation under 18 U.S.C. § 1001.

Conspiracy and Attempt
Those working together fraudulently to obtain PPP loans or forgery certification could face conspiracy and attempt charges under 18 U.S.C. § 371 and 18 U.S.C. § 1349 laws.

False Claims Act Violations
The DOJ also charges individuals under the False Claims Act, among other things, for defrauding a government program on allegations of PPP loan fraud. Those who have committed PPP loan fraud may face civil and criminal penalties under the act.

In Conclusion
Those facing a DOJ investigation for PPP loan fraud should work with an experienced criminal defense attorney in navigating the legal system and building a robust defense. Although there are many defenses available to individuals and businesses that received PPP loans, it’s essential to remember that the allegations regarding PPP loan fraud are taken very seriously by the DOJ. Any person found guilty of the offense will be aggressively pursued and prosecuted to the full extent of the law.