CALIFORNIA CRIMINAL LAWYERS

Fresno PPP and EIDL Loan Fraud Lawyers

DOJ’s Crackdown on PPP Loan Fraud

The Paycheck Protection Program (PPP), a loan program intended to aid businesses adversely affected by the COVID-19 pandemic, was misused by fraudulent individuals and businesses. Due to this, the DOJ has ramped up its efforts to investigate PPP loan fraud. They have taken an aggressive stance, filing charges against several companies and individuals involved in various types of fraud. Their partnership with other federal agencies has allowed them to better identify fraudulent activities and prosecute offenders.

The DOJ’s Initiative to Combat PPP Loan Fraud

PPP loan fraud has resulted in significant costs to the US government. The vast majority of PPP loan recipients have used their loans for purposes that were not allowed, while many ineligible companies and individuals received loans. To counter the spread of PPP loan fraud, the DOJ has initiated an extensive investigation to pursue and prosecute companies and individuals believed to have submitted fraudulent loan applications and used PPP loan funds for unauthorized purposes. The DOJ aims to target anyone who defrauds the critical Paycheck Protection Program.

Charges Filed in PPP Loan Fraud Cases

The DOJ has already filed several charges in PPP loan fraud cases. Creating shell companies and falsifying payroll information, using PPP loan funds to pay for lavish personal expenses, and attempting to obtain multiple PPP loans are among the most common types of PPP loan fraud that the DOJ encounters.

DOJ’s Partnership with Other Federal Agencies

The DOJ is not singlehandedly carrying out the investigation on PPP loan fraud. They are working with other federal agencies such as 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), who share the DOJ’s commitment to identifying and prosecuting organizations and individuals that unlawfully took advantage of the federally-backed PPP loans.

Defenses During DOJ PPP Loan Fraud Investigations

Individuals and companies that are being accused of PPP loan fraud by the DOJ face grave penalties, but some potential defenses could help them. These defenses are specific to PPP and could be employed based on the specific charges placed under the statutes stated above.

Paycheck Protection Program Compliance

The first defense that individuals and companies have when facing PPP loan fraud accusations by the DOJ is to prove their compliance with the program’s regulations. Adhering to PPP‚Äôs terms may result in an amicable resolution when representing clients accused of PPP loan fraud.

Lack of Intent to Defraud

Under federal law, criminal guilt could generally require intent to defraud. Hence, it could serve as a defense against charges if companies unintentionally obtained a PPP loan they were ineligible for, inappropriately used PPP funds, or submitted fraudulent forgiveness certificates that could not be verified.

Potential Charges in Federal PPP Loan Fraud Investigations

Several federal statutes could trigger charges in PPP investigations. Some of the possible charges that could be filed against individuals or organizations are False Claims Act violations, making false statements to a federal agent during an investigation or audit of PPP loan fraud, wire fraud, bank fraud, tax evasion, and conspiracy, to name a few.

Conclusion

PPP loan fraud is a severe legal offense, and the consequences are serious. Compliance with PPP regulations and providing proof of compliance when needed is crucial. Companies and individuals accused of PPP loan fraud should immediately contact their legal representatives to discuss potential defenses and strategies to use in their cases. The DOJ’s partnership with various federal agencies only strengthens their pursuit of justice in the fight against PPP loan fraud.