In 2020, the U.S. federal government enacted the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Part of that legislation, known as the Paycheck Protection Program (PPP), was aimed at helping businesses that were negatively impacted by the Covid-19 pandemic. It was intended to provide loans to help small-business owners keep workers on the payroll, and the businesses didn’t have to pay the money back as long as they used most of it to pay employees.
Within a year, the PPP program had loaned out over $750 billion dollars, and the U.S. Department of Justice had brought criminal charges against more than 200 people for fraud related to the loans. In the current environment of heightened scrutiny, the DOJ is continuing to investigate and aggressively pursue potential fraud cases, and many more convictions are expected.
If you are being investigated for or have been charged with PPP loan fraud in Florida, you need an experienced federal defense attorney to protect your rights and future. An attorney who knows how to navigate the complex federal system can best defend you against these serious charges.
Attorney David Haas has years of experience as a federal prosecutor and understands the ins-and-outs of the federal system. He will put his experience and knowledge to work fighting to protect your rights and your future.
The Purpose of the Paycheck Protection Program
The PPP program officially ended on May 31, 2021. For those who qualified, a PPP loan was intended to provide a direct incentive for small businesses to keep their workers on the payroll. Allowable use of loan funds included things such as payroll costs, employee benefits, mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020 and certain supplier costs and expenses for operations.
First draw PPP loans were forgiven if all the following conditions were met during the 8–24-week period following disbursement:
- Employee and compensation levels were maintained.
- The loan proceeds were spent on payroll costs and other eligible expenses.
- At least 60 percent of the proceeds were spent on payroll costs.
PPP Loan Fraud Investigations and Allegations
Most businesses that applied for and received PPP loans needed the funds to prevent financial ruin. However, some borrowers took advantage of the relaxed application and qualification processes and submitted false information or fake documents, created bogus companies, used stolen identities or aliases, and used the loan money to finance anything from pricey new vehicles to luxury vacations.
Consequently, the U.S. Department of Justice (DOJ) began actively targeting large businesses, small businesses and sole proprietors suspected of PPP loan fraud soon after the program was initiated and is continuing to aggressively pursue offenders throughout 2021. If you are the target of one of these investigations, you could be charged with a variety of federal financial crimes, including bank fraud, government procurement fraud, money laundering, and disaster-relief fraud.
If convicted of these charges, you face serious potential penalties. The maximum penalty for a bank fraud conviction, for example, is 30 years in prison and a $1 million fine, while the maximum penalty for money laundering is five years in prison and a $250,000 fine.
If you are being investigated or charged with PPP loan fraud, you need an experienced federal defense attorney to help protect your rights and aggressively defend you through all stages of the investigation and prosecution. The following sections of this blog post will explain what you can do to help ensure the best possible outcome for your case.
Protect Your Rights during a Federal Investigation by Hiring an Experienced Federal Financial Crimes Defense Attorney
Federal law enforcement agencies are responsible for investigating suspected PPP loan fraud and other types of financial crimes. A federal grand jury, however, may spearhead that investigation. Many people do not realize that a federal grand jury investigation does not have to specify the target of its investigation and there are few limitations to its investigative powers. As a result, individuals who are not initially a target of a federal grand jury investigation can subsequently become targets, leading to an arrest and prosecution. This means that even if you are only tangentially involved in a federal investigation, you should consult with an experienced federal financial crimes attorney right away.
An experienced federal defense attorney, especially one with previous experience as a federal prosecutor, will be familiar with the nuances, complexities, and strategies of federal investigations and be able to advocate effectively on your behalf. It may, in fact, be in your best interest to invoke your constitutional right to remain silent and count on your attorney to engage in investigative conversations with the prosecution team. Federal grand jury procedures are complicated, so your attorney’s ability to communicate effectively with federal agents and federal prosecutors is crucial.
Handle All Potential Evidence Very Carefully during a Federal PPP Fraud Investigation
If you have been notified that you are a target of a federal investigation, extreme care must be taken regarding how you handle potential evidence within your possession. Destroying or altering records, even if done in the ordinary course of business, can result in obstruction of justice charges. In fact, something as seemingly innocuous as disclosing the receipt of a federal grand jury subpoena can lead to criminal charges being filed against you. Consult with your attorney about the best way to handle documents and other potential evidence to avoid such an outcome.
Along with protecting you from further charges, an experienced federal defense attorney can help you save time and expenses when gathering the required documents and records. Grand jury subpoena requests for these items are often very broad; however, an experienced federal defense attorney can coordinate a response with the federal prosecutor that is more specifically tailored to your case so the process is more efficient.
Achieve the Best Outcome When Facing PPP Fraud Charges
If you or your company receives a federal grand jury subpoena, you need an attorney who is familiar with federal law and procedure to help you formulate an appropriate response. To begin with, an experienced attorney can determine if you are a witness or an actual target of the investigation and help you decide on your best option, given the circumstances of your case.
Your federal defense attorney may be able to persuade the prosecutor to close the investigation or reclassify you as a witness rather than the target. If a criminal indictment is imminent, however, your attorney may still be able to negotiate a favorable pre-indictment plea agreement. If your case goes to trial, your attorney will fight zealously to protect your rights and your future.
Experienced, Skilled Former Federal Prosecutor in Florida
When you are being investigated by the federal government, testifying for a federal grand jury, meeting with federal agents or going to trial in a federal criminal case, you need a highly-skilled, experienced federal defense attorney in your corner. No one is better prepared to help you at every stage of the process than someone who has both federal prosecution and defense experience.
Call Haas Law today at 407-755-7675, chat with us online, or submit the “Tell Us What Happened” form on our website for the knowledge, depth of experience, and record of success you need. Because we understand that time is of the essence when federal law enforcement authorities are investigating you, our calls are answered 24 hours a day so you can schedule an appointment as soon as possible to discuss your legal options.