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DOJ Investigations for PPP Loan Fraud: What You Need to Know

The COVID-19 pandemic hit the world with devastating consequences, causing widespread unemployment and serious economic decline. To help combat the economic ramifications of the pandemic, the Paycheck Protection Program (PPP) was established. The PPP aimed to assist struggling businesses to stay afloat by offering forgivable loans to cover employee payroll and other expenses. Unfortunately, however, fraudsters saw an opportunity in the PPP, and it became a prime target for fraudulent activities. These nefarious activities prompted the US Department of Justice (DOJ) into action to stem the tide of PPP loan fraud.

The DOJ is Aggressively Pursuing Charges for PPP Loan Fraud

Due to the significant cost of PPP loan fraud and the widespread publicity of fraudulent activities targeting the program, the DOJ has become aggressive in targeting individuals and companies suspected of such activities. Their investigations have been focused on trying to prosecute those suspected of PPP loan fraud. The DOJ, in partnership with the US Small Business Administration Office of Inspector General (SBA-OIG), the Federal Deposit Insurance Corporation Office of Inspector General (FDIC-OIG), the Federal Bureau of Investigation (FBI), and Internal Revenue Service Criminal Investigations (IRS-CI), is working tirelessly to uncover the fraudulent activities that have occurred under the PPP program. The DOJ has already issued criminal complaints and pursued charges against several culprits involved in fraud in connection with the PPP program.

The DOJ is Actively Pursuing PPP Loan Fraud Cases

The DOJ has already filed charges in several cases of PPP loan fraud, suggesting that the risks of facing a DOJ PPP loan fraud investigation are not theoretical. Several individuals were charged with creating fake companies and falsifying payroll information to qualify for PPP loans. Others have been using PPP loan funds to cater to personal expenses way beyond the scope of the PPP intended purposes.

PPP Loan Fraud Defenses to Assert

Facing a DOJ investigation for PPP loan fraud is a serious matter, one with very severe consequences. If you ever find yourself in such a predicament, you must act fast and hire an experienced law firm that has defended clients in similar situations before. Attorneys representing clients in PPP loan fraud cases usually rely on several potential defenses specific to the Paycheck Protection Program and applicable based on the specific charges listed above. These include demonstrating compliance with the PPP program, lack of intent to defraud, and a timely filing of a PPP loan application.

PPP Loan Fraud Potential Charges

PPP loan fraud investigations often trigger both civil and criminal charges under several pre-existing federal statutes. Some of these potential charges include aggravated identity theft, bank fraud, attempt, conspiracy, and false claims act violations. Thus, it is crucial that you work closely with an experienced law firm to develop a robust defense strategy if you are facing PPP loan fraud investigations.

Conclusion

PPP loan fraud is a severe crime, and the DOJ is actively pursuing anyone suspected of fraudulent activities carried out under the PPP program. When facing a DOJ investigation, it is critical that you engage the services of an experienced law firm such as Todd Spodek Law. Our experienced lawyers have a wealth of experience handling complicated PPP loan fraud cases and guiding our clients to achieve the possible outcome.