The number of PPP loan fraud investigations is increasing nationwide. In an effort to recover money that might have been unlawfully obtained from COVID-19 assistance programmes, federal prosecutors and criminal investigators from several federal agencies are actively searching for probable PPP loan fraud, EIDL loan fraud, and other CARES Act crimes.
Numerous PPP fraud investigations have been resolved with the aid of our firm, frequently without the need for any criminal charges to be brought against the clients. When someone hires us to represent them in a PPP or EIDL loan fraud case, we get in touch with the investigators and any appointed prosecutors right away. In addition to learning the reason why our client is being looked into, we also work to ascertain what evidence the government may have against them.
In order to determine if we have a strong defence against any fraud allegations, we then engage with our client to evaluate the pertinent records (sometimes with the help of experienced forensic accountants). We then give the government an explanation of the client’s condition and provide details that the agents or prosecutor might not have known. We frequently succeed in assisting our clients in avoiding any criminal accusations. In situations where charges have already been brought, we support our clients by helping them to negotiate the best outcome or litigate the matter.
Because our firm has assisted clients in PPP and EIDL fraud investigations across the nation, we are familiar with the laws and processes that relate to these cases as well as the specific evidence that the government is seeking. Other attorneys just do not have the depth of experience that our defence attorneys do in these investigations.
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What is fraud in PPP loans?
When a person or company provides fraudulent information in an application or certification for a loan under the federal Paycheck Protection Program, that is known as PPP loan fraud (PPP). The PPP was developed to give businesses forgiving loans to compensate for payroll and operating costs during the coronavirus pandemic. Through commercial banks, businesses can apply for PPP loans, but they must first meet a number of requirements. Even after receiving a PPP loan, a company is still subject to stringent guidelines and restrictions on how it can use the money.
How does a PPP loan fraud investigation proceed?
Determine whether charges should be filed against someone for breaking one or more of the stringent rules of the PPP loan programme is the main goal of a PPP loan fraud investigation. Federal prosecutors have typically targeted organisations and people who might have breached the PPP lending scheme through:
falsifying information on the PPP loan application
Loan stacking is the practise of requesting PPP loans from various lenders.
Using PPP loan funds in an incorrect or prohibited manner
submitting a fake certification for the discharge of PPP loans
lying to agents in the course of a PPP loan audit or investigation
Fraudulent PPP loan charges carry severe criminal and civil penalties. Although a PPP loan fraud case could involve a number of other criminal offences, the following are the most typical ones:
Using “the wires” (which includes the internet or the phone) to steal money by making false claims or promises is known as wire fraud (18 U.S.C. Section 1343). Up to 20 years in prison may be imposed as a penalty, depending on how much money was taken.
Similar to wire fraud, bank fraud (18 U.S.C. Section 1344) entails making false representations to a bank or other financial organisation. This statute has a maximum sentence of 30 years in jail.
False Statements to a Financial Institution (18 U.S.C. Section 1014) – According to this statute, lying to a bank or other financial institution is prohibited. In order to qualify for the loan, this typically entails making false representations on a loan application or in documents presented to the bank. Furthermore, a 30-year prison sentence is possible. (Congress is effectively lobbied by the banks.)
Conspiracy to Commit Fraud (18 U.S.C. Section 1349) – This statute makes it a federal criminal to make plans to commit fraud, even if no money is actually taken or false statements are made. The agreement stipulates that the punishment for conspiracy is the same as the punishment for the fraud crime.