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What are the Charges for PPP Loan Fraud?

PPP loan fraud charges

Due to a high volume of calls, we are able to only take those PPP clients who have received a PPP loan greater than $100,000. If your loan is less, we have created a list of PPP resources that should help you with any challenges that you might have.

PPP Resources:

Find an attorney to defend youhttps://lawyers.findlaw.com/lawyer/practice/white-collar-crimes
Find an attorney to help you obtain a loanhttps://lawyers.findlaw.com/lawyer/practice/business-commercial-law
Report fraud/thefthttps://www.sba.gov/funding-programs/loans/covid-19-relief-options/reporting-identity-theft
How to apply for a loan on your ownhttps://bench.co/blog/operations/how-to-apply-first-ppp-loan/
What to do if the SBA doesn’t forgive your loan – https://www.schwabe.com/newsroom-publications-a-guide-to-the-sba-ppp-loan-forgiveness-review-process

Dr. Nick Oberheiden is nationally recognized with his knowledge of PPP loan laws
and has been seen on Forbes, CNBC and Fox Business.
Speak with Dr. Oberheiden today for a free consultation at 888-680-1745.

If you’re facing an investigation for Paycheck Protection Program (PPP), here are the charges that could be on the table.

Federal authorities are aggressively targeting individuals and companies for PPP loan fraud. Launched in March 2020 in response to the economic uncertainty that was triggered by the recent pandemic, the PPP made hundreds of millions of dollars in federal funding available to businesses struggling as a result of the pandemic. Loans issued under the PPP carry a 1% interest rate, but the loans are completely forgivable if certain conditions are met.

The low-cost (and potentially free) funds offered under the PPP have proven to be attractive not only to struggling businesses, but also to larger companies and scam artists. This has led to worry of widespread fraud (and a few highly-publicized cases of fraudulent PPP loan applications), and it has forced numerous federal agencies to turn their attention to combatting PPP loan fraud.

Currently, the U.S. Department of Justice (DOJ), Federal Bureau of Investigation (FBI), Internal Revenue Service (IRS), and U.S. Small Business Administration Office of Inspector General (SBA-OIG) are all actively conducting investigations under the PPP. These investigations are leading to a plethora of federal charges, corporate executives, and company owners, and other individuals accused of PPP loan fraud are facing enormous fines and the potential for decades of federal imprisonment.

Understanding the PPP’s Requirements and the Charges for PPP Loan Fraud

For individuals and companies that have applied for and received PPP loans, a key thing to understand is that the PPP itself does not include provisions for criminal enforcement. The PPP was established under the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020, and the CARES Act is not a penal statute.

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Dr. Nick Oberheiden

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Lynette S. Byrd

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Brian J. Kuester

Former U.S. Attorney
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John W. Sellers

Former Senior Trial Attorney
U.S. Department of Justice

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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)

Instead, the DOJ is relying on the pre-existing federal laws that are used to prosecute fraud crimes generally in order to prosecute PPP fraud. This means that they have a multitude of tools at their disposal; and, as some of the early PPP loan fraud cases have shown, prosecutors are making full use of the tools they have available.

When Can the DOJ File Charges for PPP Loan Fraud?

Although the law around PPP loan fraud is still developing, there are already various acts and practices that have been identified as constituting fraud under the PPP. This includes acts and practices related to (i) PPP loan applications, (ii) the use of PPP loan funds, and (iii) certifications for PPP loan forgiveness.

1. PPP Loan Application Fraud

Although millions of small businesses were (and remain) eligible for PPP loans, not all businesses have the ability to obtain federal funds under the program. In particular, only businesses that qualify as “small business concerns” under the Small Business Act, 15 U.S.C. § 632, are eligible, and applications must be based on the need for funding due to, “the uncertainty of current economic conditions mak[ing] necessary the loan request to support the ongoing operations of the eligible recipient.”

2. Fraudulent Use of PPP Loan Funds

Funds gained under the PPP may only be used for the purposes authorized under the CARES Act. These include (i) payroll expenses, (ii) interest and rent payments under pre-existing obligations, (iii) insurance premiums, and (iv) utilities. Use of PPP loan funds for any other purpose has the potential to be characterized as PPP loan fraud.

3. PPP Loan Forgiveness Certification Fraud

To obtain forgiveness of the obligation to repay their PPP loans, companies must certify that they have complied with all of the requirements of the program. Submitting a false certification (including a certification made with incomplete knowledge) is also considered a form of PPP loan fraud. In fact, in certain respects, this may be the most serious form of PPP loan fraud because it results in non-repayment of the loan received.

What are the Possible Charges for PPP Loan Fraud?

There are many permutations of each of the forms of PPP loan fraud listed above, and companies, banks, and individuals all have the potential to face allegations of perpetrating or facilitating fraud under the PPP. As referenced above, these allegations can lead to a multitude of different charges at the federal level. This includes (but is not limited to) charges for:

Speak with a Federal PPP Loan Fraud Defense Lawyer at Oberheiden P.C.

Our firm is representing individuals and companies nationwide in federal PPP loan fraud investigations throughout the coronavirus pandemic. If you are facing the possibility of federal charges for PPP loan fraud, or if you have already been charged and are facing prosecution in federal district court, our team can help.

We also represent clients in need of qui tam and healthcare fraud defense, involved in federal investigations, facing federal criminal charges, and in other legal matters. We encourage you to call 888-680-1745 or contact us online immediately to arrange a free initial consultation.

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