CALIFORNIA CRIMINAL LAWYERS

Bakersfield PPP and EIDL Loan Fraud Lawyers

What You Need to Know About Facing PPP Fraud Charges: DOE’s Prosecution Stance and Potential Defenses

Companies, their owners, and executives that are under investigation for PPP fraud are experiencing a distressing situation. The DOE is pursuing vigorously individuals and businesses that are found to engage in PPP fraud, including those who submitted fraudulent loan applications and those who misused PPP loan funds. The DOE is committed to working with other federal law enforcement agencies to investigate and prosecute fraudulent behaviors aggressively.

## DOE’s Approach to Prosecuting PPP Loan Fraud Cases

The Paycheck Protection Program was launched as a lifeline to help struggling businesses survive during the pandemic crisis. Still, it quickly became prone to fraudulent activities. As a result, the Department of Justice (DOE) takes fraudulent activities very seriously and is actively targeting individuals and entities that may be involved in any illegal activities under the PPP program, including submitting false certifications for loan forgiveness. According to a DOE official, “Our office will be aggressive in targeting anyone who defrauds this critical program.”

## Multiple PPP Loan Fraud Cases Under DOE Investigation

The DOE has filed an ever-increasing number of charges under PPP loan fraud investigations. Among the charges already filed are false payroll information, the use of PPP loan funds to cover personal expenses, and attempts to obtain multiple PPP loans. The fines, probation, and incarceration are some of the possible consequences of being charged with PPP fraud.

## DOE’s Collaborations with Other Federal Law Enforcement Agencies to Combat PPP Loan Fraud

To combat PPP scheme fraud, the DOE has joined forces with other agencies, including the U.S. Small Business Administration Office of Inspector General and the Federal Bureau of Investigation. The agencies are working together to uncover evidence of PPP loan fraud, including attempts by individuals or entities to obtain forgivable loans offered under the program illegally.

## Potential Defenses Against PPP Loan Fraud Charges

Although the accusation of PPP loan fraud can be intimidating, there are several defenses available for individuals and companies facing allegations. Here are some of the potential defenses:

### Defense based on PPP Compliance

Many individuals and companies defend themselves by demonstrating compliance with the PPP terms. They can prove compliance by showing that they legally obtained a PPP loan and properly documented the authorized use of their PPP funds. Moreover, during the investigation, charged individuals or companies need to be careful about the information they share with the DOE.

### Lack of Intention to Defraud

People and companies facing PPP fraud charges can utilize the defense of “lack of intent,” which implies that the involvement of the individual or entity in fraudulent activities was unintentional. Federal law requires criminal culpability to prove the intent to defraud. Thus, even if an entity unlawfully obtained a PPP loan, used PPP funds inappropriately, or submitted a fraudulent certification, the lack of intent could be a valid defense.

### Other PPP Loan Fraud Defenses

There are other defenses that individuals and companies can assert during a PPP loan fraud investigation. It is to consult with an experienced PPP lawyer to determine the strongest defense in each case.

## PPP Loan Fraud Charges That Individuals and Companies Might Face

PPP loan fraud could trigger civil and criminal charges under various pre-existing federal statutes, even though the CARES Act does not specify any penal provisions for PPP loan fraud. The penalties for false statements, bank fraud, and wire fraud are dire and could result in significant fines and imprisonment. PPP fraud charges that individuals and businesses might face are:

РMaking False Statements to the Small Business Administration (SBA) (18 U.S.C. § 1014).
РMaking False Statements to an FDIC-Insured Bank (18 U.S.C. § 1014).
РBank Fraud (18 U.S.C. § 1344).
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).
РAttempt (18 U.S.C. § 1349).
РFalse Claims Act Violations (31 U.S.C. §§ 3729–3733).

## Conclusion

Facing a PPP loan fraud investigation is a daunting experience; it is essential to consult with an experienced PPP lawyer to craft an appropriate response. With a PPP lawyer’s help, individuals and companies facing PPP loan fraud charges can uncover strong defenses and protect themselves from the devastating consequences of the charges.