CALIFORNIA CRIMINAL LAWYERS

Texas PPP and EIDL Loan Fraud Lawyers

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

The COVID-19 pandemic has made financial hardship a reality for many businesses. In response, the Paycheck Protection Program (PPP) was created to provide relief to these businesses through loans. However, it has since come to light that the program has been targeted by fraudulent individuals and entities, leading to investigations by the U.S. Department of Justice (DOJ) into PPP loan fraud. Being targeted by the DOJ can be alarming, but the key is to understand the process and your rights. Here’s what you need to know about DOJ investigations into PPP loan fraud.

The DOJ is Focused on Prosecution

The DOJ is serious about holding individuals and companies accountable for their actions. They recognize that PPP loan fraud costs the government a significant amount of money, and as such, they are committed to targeting those suspected of unlawfully obtaining loans, improperly using PPP loan funds, or submitting fraudulent certifications for loan forgiveness. It is important to note that the DOJ will not hesitate to prosecute anyone suspected of fraud.

Numerous PPP Loan Fraud Cases Have Been Brought

The DOJ has already filed charges in various PPP loan fraud cases. The individuals involved in these cases are suspected of creating shell companies, falsifying payroll information to secure PPP loans, using funds for personal expenses, or attempting to obtain multiple PPP loans. The DOJ has warned that they will be aggressive in targeting anyone who defrauds the program. Businesses and individuals who have violated the rules of the PPP should be prepared to face investigations and charges.

Collaboration Between Federal Agencies

The DOJ is not working alone in its efforts to prevent PPP loan fraud. They are collaborating with multiple other federal agencies, including the U.S. 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 the Internal Revenue Service Criminal Investigations (IRS-CI). This joint effort is focused on identifying and prosecuting any individual or company who has unlawfully taken advantage of the loans offered under the PPP.

Potential Consequences and Charges of PPP Loan Fraud

It is important to understand the potential consequences that companies and individuals may face as a result of a DOJ investigation into PPP loan fraud. The following chart outlines some of the potential federal charges:

Penalty | Description
— | —
Making False Statements to the SBA (18 U.S.C. § 1014) | Criminal penalties for anyone who makes a false statement or report with the SBA «for the purpose of influencing in any way the action of the Small Business Administration.»
Making False Statements to an FDIC-Insured Bank (18 U.S.C. § 1014) | Criminal charges for submitting false information to the SBA or their PPP lenders.
Bank Fraud (18 U.S.C. § 1344) | Crime: defrauding a financial institution or obtaining property owned by a financial institution through false or fraudulent representations or promises.
Wire Fraud (18 U.S.C. § 1343) | Criminal charges for anyone who uses any interstate communication device to commit fraud or obtain money or property through false or fraudulent representations.
Aggravated Identity Theft (18 U.S.C. ¬ß 1028A) | Criminal charges for those who knowingly transfer, possess, or use another person’s means of identification.
Tax Evasion (26 U.S.C. § 7201) | Criminal charges for anyone who attempts to evade any tax imposed by the Internal Revenue Code.
Making False Statements to Federal Agents (18 U.S.C. § 1001) | Criminal charges for those involved in fraudulent attempts to receive federal PPP funds.
Conspiracy (18 U.S.C. § 371 and 18 U.S.C. § 1349) | Conspiracy charges can be filed against anyone involved in attempts to gain PPP funds through fraud or other illegal means.
Attempt (18 U.S.C. § 1349) | Federal charges for anyone who makes unsuccessful attempts to commit PPP loan fraud.
False Claims Act Violations (31 U.S.C. §§ 3729 – 3733) | Significant civil penalties, fines, and damage claims can result from unintentional or intended PPP loan fraud under the False Claims Act.

Defenses to PPP Loan Fraud Charges

It is important to remember that there are defenses that individuals and businesses can assert during prosecution for PPP loan fraud. These defenses may include demonstrating compliance with the terms of PPP loans or challenging the charges as laid out in the statutes governing PPP loans. It may also be an option to demonstrate a lack of intent to defraud. Civil False Claims Act violations with severe consequences are another area where legal representations by experts could prove useful.

In conclusion, PPP loan fraud is a serious issue, and the DOJ is committed to prosecuting those who take advantage of the program. As a business owner, it‚Äôs critical to understand the steps involved in a DOJ investigation into PPP loan fraud and work with lawyers who understand this area of the law to develop a strong defense. Todd Spodek, a prominent law firm, has the experience required to handle PPP loan fraud investigations and offers professional advice on how to avoid or get out of legal trouble associated with PPP loan fraud. Now that you’re aware of the potential penalties and charges, take action to protect yourself and your business.