Is Your Company Being Investigated for PPP Loan Fraud?

If your company is being investigated for fraud under the Paycheck Protection Program (PPP), executing a strategic and proactive defense needs to be your top priority. Our former federal prosecutors and investigative agents provide PPP loan fraud defense representation for companies nationwide.

Many companies are facing federal fraud investigations under the Paycheck Protection Program (PPP). Since the launch of the PPP, the program has been plagued by fraudulent applications for federal funds, and this has forced multiple federal agencies to make investigating and prosecuting PPP loan fraud a top priority.

Is Your Company Under Investigation for PPP Loan Fraud?

If your company is under investigation, what should you do? While the PPP is a new program – having been formed under the Coronavirus Aid, Relief, and Economic Security (CARES) Act signed into law on March 27, 2020 – the U.S. Department of Justice (DOJ) has already initiated numerous prosecutions under the PPP. Federal agents are looking for a number of specific “red flags” for fraud, and they are focusing on gathering evidence to pursue an array of federal charges.

With this in mind, companies that are facing PPP loan fraud investigations need to engage federal defense counsel promptly. While the DOJ is aggressively pursuing charges, it is still possible to resolve PPP loan fraud allegations at the investigative stage in many cases. At Oberheiden P.C., defending clients in federal investigations is a core component of our practice, and we have resolved the vast majority of our clients’ investigations without formal charges being filed.

Put our highly experienced team on your side

Dr. Nick Oberheiden

Founder

Attorney-at-Law

Lynette S. Byrd

Former Department of Justice

Brian J. Kuester

Former U.S. Attorney
Former DA

John W. Sellers

Former Senior Trial Attorney
U.S. Department of Justice

Local Counsel

Joanne Fine DeLena

Former Assistant U.S. Attorney

Local Counsel

Joe Brown

Former U.S. Attorney & Former District Attorney

Local Trial & Defense Counsel

Amanda Marshall

Former U.S. Attorney

Local Counsel

Aaron L. Wiley

Former Federal Prosecutor

Local Counsel

Roger Bach

Former Special Agent (OIG)

Michael Koslow

Former Supervisory Special Agent (FBI)

Chris Quick

Former Special Agent (FBI & IRS-CI)

Ray Yuen

Former Supervisory Special Agent (FBI)

Our Firm’s Practice is Devoted to Representing Clients in High-Stakes Federal Matters

We are a federal compliance and defense law firm. We are not like other law firms that have attempted to expand the scope of their practice in order to capitalize on the government’s targeting of coronavirus-related fraud. Our practice has always been devoted to representing clients in high-stakes matters, and all of our attorneys have extensive experience in federal practice.

In fact, several of our attorneys are former federal white-collar prosecutors with the DOJ and the U.S. Attorney’s Office. We also utilize the services of former high-ranking agents with the DOJ Office of Inspector General (DOJ-OIG) and other federal investigative agencies. As a result, we are intimately familiar with the federal investigative and prosecutorial processes, and we are able to advice our clients based on centuries of collective experience handling thousands of federal cases from both sides.

Learn more about the former federal prosecutors and investigative agents at Oberheiden P.C.

What are the Next Steps for Companies Facing PPP Loan Fraud Investigations?

Your company is under investigation. You received a subpoena, target letter, civil investigative demand (CID), criminal complaint, or other form of inquiry alluding to allegations of PPP loan fraud. What are your next steps?

1. Make Sure You Know Any Deadlines that Apply

First, you must make sure you are aware of any deadlines that apply. While not all forms of federal investigative inquiries impose deadlines, some (i.e. subpoenas and CIDs) do. If your company has a legal obligation to respond, you must prepare to submit a timely and compliant response, as failing to do so could not only potentially have negative ramifications for the investigation going forward, but could potentially lead to federal sanctions as well.

While it may be possible to obtain an extension in some cases, and while there are limited grounds for challenging the legality of certain types of requests, you must plan to fully comply by the stipulated deadline – at least initially. When you engage our firm, our federal defense attorneys will review the government’s investigative request in detail, asses any grounds for filing a full or partial motion to quash, and work with your company’s personnel to begin assembling a response that both (i) is compliant, and (ii) preserves the attorney-client privilege.

2. Conduct an Internal Corporate Audit or Investigation

Upon learning of a PPP loan fraud investigation, it is imperative to launch an internal corporate audit or investigation focused on uncovering any potential evidence of fraud that may come to light during the government’s inquiry. You need to know what federal agents will find (if anything); and, if there are issues that present a risk for civil or criminal prosecution, you must be prepared to execute an effective defense strategy that takes into consideration all pertinent facts and circumstances.

Our attorneys and former federal agents can take charge of your company’s internal audit or investigation, and we can work with the appropriate internal personnel to ensure that you have a clear picture your company’s risk exposure. Potential issues that will need to be investigated include:

• Lack of substantiating documentation for representations made in your company’s PPP loan application
• Submission of false or misleading information on your company’s PPP loan application
• Failure to segregate and document the use of PPP loan funds
• Use of PPP loan funds for unauthorized or unlawful purposes
• Lack of substantiating documentation for your company’s loan forgiveness application
• Submission of false or misleading information on your company’s loan forgiveness application
• Federal payroll tax or income tax non-compliance in relation to the use of PPP loan funds

3. Make an Independent Determination of PPP Loan Compliance

Based on the information obtained through your company’s internal audit or investigation, you will then need to make an independent determination with regard to your company’s PPP loan compliance. This determination should be entirely unbiased, and it should be based upon an assessment provided by your company’s outside legal counsel. If the internal audit or investigation provides comprehensive documentation of compliance, then you can use this information going forward as you respond to the government’s inquiry. If it reveals non-compliance or acts or omissions that could potentially be prosecuted as PPP loan fraud, then you will need to structure your company’s response accordingly.

4. Develop a Strategy for Engaging with the Investigating Agency

Regardless of what your company’s internal audit or investigation reveals, you will need a strategy for dealing with the investigating agency. Multiple agencies are currently conducting PPP loan fraud investigations, and each has its own specific priorities and procedures for targeting companies suspected of fraud. At Oberheiden P.C., we have experience handling investigations conducted by all agencies that are currently involved in uncovering PPP loan fraud, including:

• U.S. Department of Justice (DOJ)
• U.S. Small Business Administration Office of Inspector General (SBA-OIG)
• Federal Bureau of Investigation (FBI)
• Federal Deposit Insurance Corporation Office of Inspector General (FDIC-OIG)
• Internal Revenue Service’ (IRS)

Once you know which agencies are handling your investigation and what information they are going to find, then you can develop a strategy for taking a proactive approach to favorably resolving the investigation. As your company’s PPP loan fraud defense counsel, we will develop a strategy that is custom-tailored to your company’s present circumstances and that calls upon our attorneys’ and former agents’ centuries of combined experience in high-stakes federal cases.

5. Make Contact with the Investigating Agency and Intervene in the Investigation

With a strategy in place, the next step is to make contact with the investigating agency (or agencies) and intervene in the investigation. This is a crucial step, and it needs to be taken as soon as possible—which also makes it imperative to conduct your company’s internal audit or investigation right away. With our attorneys’ and former agents’ prior experience handling federal fraud investigations, we know how to do this effectively, and we will deal with the authorities on your company’s behalf while you remain focused on your company’s day-to-day operations.

6. Execute Your Company’s Defense Strategy with a Focus on Pre-Charge Resolution

In order to mitigate the risks of your company’s PPP loan fraud investigation to the fullest extent possible, the execution of its defense strategy should focus on achieving a pre-charge resolution. In other words, you want to resolve the investigation without federal prosecutors reaching the conclusion that they have the evidence they need to go to court. Intervening promptly will provide the greatest amount of time to pursue a favorable pre-charge result, and we have had significant success fending off federal charges on behalf of our clients.

7. Respond to Charges and Prepare a Litigation Defense as Necessary

If it is too late to prevent charges from being filed, then your company will need to shift its strategy toward litigation defense. Our federal defense attorneys have extensive experience on both sides of civil and criminal enforcement matters, and we can use this experience to your company’s advantage. In addition to securing favorable results at trial, we have secured favorable pre-trial results in numerous cases as well; and, here too, we will focus our representation on achieving an advantageous result based upon the specific circumstances at hand.

Discuss Your Company’s Internal Investigation and Defense Strategy with a Federal Attorney at Oberheiden P.C.

For more information about our firm’s federal defense practice, contact us promptly to schedule a free initial consultation with one of our senior attorneys. Call 888-680-1745 to discuss your case in confidence, or tell us about your situation online and an attorney will be in touch with you shortly.

Nick Oberheiden

Dr. Nick Oberheiden, founder of Oberheiden P.C., focuses his litigation practice on white-collar criminal defense, government investigations, SEC & FCPA enforcement, and commercial litigation.