CALIFORNIA CRIMINAL LAWYERS

Michigan PPP and EIDL Loan Fraud Lawyers

How to Defend Against a DOJ PPP Loan Fraud Investigation

Since the Paycheck Protection Program (PPP) was implemented, federal prosecutors have been actively investigating and targeting individuals and companies believed to have submitted fraudulent loan applications and made unauthorised use of PPP funds. As a result, facing a DOJ investigation can have severe consequences, including the possibility of large fines, loss of licensure, criminal charges and imprisonment. In this article, we will discuss some defences that individuals and companies can assert during investigations for PPP loan fraud.

PPP Compliance: The First Defence

The first defence that individuals and companies accused of PPP loan fraud may want to consider is PPP compliance. Demonstrating full compliance with PPP terms, such as having used the loan for eligible expenses, establishing a segregated PPP loan account, and preparing detailed documentation supporting loan forgiveness application, can significantly mitigate the risk of prosecution for PPP loan fraud. Seeking the guidance of an experienced PPP loan compliance attorney can also be beneficial.

Lack of Intent to Defraud: Another Defence

For any criminal prosecution, the intent to defraud must first be proven. If an individual or a company inadvertently obtained a PPP loan or submitted a fraudulent forgiven certification without fraudulent intent, the lack of intent can be used as a defence. However, for civil violations of the False Claims Act and other statutes, lacking intent is not enough to avoid substantial fines, treble damages and other penalties.

PPP Legal Counsel: An Added Advantage

Retaining experienced legal counsel with specific knowledge of the PPP program can give individuals and companies increased chances of a favourable outcome during PPP investigations. An experienced attorney can help clients understand the legal process, assist in responding to government inquiries, and build a legal defence.

Co-operating with the Government: A Winning Option

Working with government officials during a PPP fraud investigation can help to reduce criminal charges or penalties. By co-operating with the government, an opportunity arises to negotiate downgraded charges, plea or settlement agreements, and, in some cases, avoid potential criminal prosecution.

Possible Charges in a DOJ PPP Loan Fraud Investigation

PPP loan fraud can lead to criminal charges under pre-existing federal statutes. Below are some potential charges that individuals or companies may face during a PPP loan fraud investigation:

False Statements to the SBA

Submitting false information on companies’ PPP loan applications or borrower application forms with the intent of receiving a PPP loan can trigger criminal charges.

Bank Fraud and FDIC Fraud

Bank fraud and FDIC fraud can be charged when a company or individual knowingly perpetrates a fraud or scheme to defraud financial institutions or receives or attempts to obtain funds, credits or money from the institution using false representations.

Wire Fraud

PPP loan fraud cases can also trigger criminal wire fraud charges. The law provides criminal penalties to anyone who uses wire communication to obtain money or property through false pretenses, representations or promises.

Conspiracy and Attempt

Individuals and businesses involved in fraudulent PPP loan schemes can face charges of criminal conspiracy for their fraudulent actions.

Tax Evasion

Acquiring PPP loans and using them for purposes not aligned with the program’s terms may attract payroll tax evasion or income tax evasion charges.

Violations of the False Claims Act

Violations of the False Claims Act can be charged when entities obtain government funds through fraudulent means.

In conclusion, PPP loan fraud is a serious federal criminal offense that can have significant civil penalties and criminal charges. In the current fraud-sensitive PPP landscape, it is essential to act with care not to open oneself up to a criminal investigation for suspicion of PPP loan fraud. If in doubt or needing legal assistance, contact Todd Spodek Law Group, an experienced legal aid with years of experience in supporting clients on matters related to PPP loan fraud.

Table of Possible Charges in a DOJ PPP Loan Fraud Investigation

| # | Charge |
|—-|————————————————————————–|
| 1 | Making False Statements to the SBA |
| 2 | Bank Fraud and FDIC Fraud |
| 3 | Wire Fraud |
| 4 | Conspiracy and Attempt |
| 5 | Tax Evasion |
| 6 | Violations of the False Claims Act |

Possible charges in a DOJ PPP loan fraud investigation include false statements to the SBA, bank fraud and FDIC fraud, wire fraud, conspiracy and attempt, tax evasion, and violations of the False Claims Act. It’s essential to act carefully in the current fraud-sensitive PPP landscape to avoid opening oneself up to criminal investigation. Seeking legal assistance from experienced legal aid such as Todd Spodek Law Group can be helpful.