The Covid-19 pandemic caused millions of businesses to temporarily shut down and resulted in stay-at-home orders for most Americans at one point or another. The economic fallout threatened to be catastrophic. Many small businesses took advantage of the Paycheck Protection Program (PPP) which offered streamlined, forgivable loans during the height of the pandemic. Now, however, the federal government is actively investigating PPP loan recipients and charging them with fraud. If you are under investigation for PPP loan fraud or have been charged with a criminal offense related to a PPP loan, you need an experienced PPP loan fraud attorney on your side immediately.
At Haas Law, we have the experience and skills necessary to understand the complex legal and procedural rules related to PPP loan fraud investigations and prosecution. Moreover, we are committed to protecting your rights, your business, and your freedom. The PPP loan fraud attorneys at Haas Law will put their extensive experience and resources to work aggressively defending you and your business if you find yourself the target of a PPP loan fraud investigation or prosecution.
What Is the PPP Loan Program?
The unprecedented nature of the Covid-19 pandemic caused mandatory shutdowns and stay-at-home orders throughout much of the United States. Understandably, local, state, and federal governments were concerned about the financial repercussions on the American economy. To avert a financial catastrophe, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law in March 2020, providing more than $2 trillion in economic relief to help Americans. The CARES Act also authorized up to $349 billion in forgivable loans to small businesses through the Paycheck Protection Program (PPP) with Congress approving an additional $321 billion in PPP funding.
Because the goal was to get money into the hands of employers as fast as possible, the regulations and guidelines applicable to the PPP loan program were less than clear and subject to change at any moment. Not only did this cause significant confusion during the application and disbursement process, but loan recipients continued to struggle with the rules and procedures relating to loan forgiveness once the loans became due.
What Is PPP Loan Fraud?
Both the scope of the PPP loan program and the confusion surrounding the application process and disbursement of loans raised concerns about fraudulent conduct. In fact, one study found that an estimated 15 percent of PP loans were fraudulently obtained. In response to these concerns, the Department of Justice began launching an extensive federal investigation almost immediately after the SECURES Act authorized the PPP loan program. While loan fraud can take many forms, common types of fraud associated with the PPP loan program include:
- Loan “stacking.” This refers to an applicant submitting multiple loan applications to different lenders, potentially receiving duplicate loans when they were only eligible for a single loan.
- Material misrepresentations. Although the program was hastily enacted and the eligibility criteria somewhat confusing, business owners were required to meet specific criteria to qualify for a loan. Knowingly providing false or misleading information on the loan application may constitute PPP loan fraud.
- Improper use of funds. Funds received as part of a PPP loan can only be used for certain things, such as employee payroll and benefits, rental payments, and utility bills. Using the funds for other purposes (such as to buy personal items) may be considered fraud.
What Are the Penalties for a PPP Loan Fraud Conviction?
Criminal conduct associated with PPP loan fraud may be prosecuted under several different federal statutes. Therefore, the penalties you face if convicted depend on the charges filed against you; however, some common examples include:
- Making False Statements to an FDIC Insured Bank or the Small Business Administration (SBA). Up to 30 years in prison and/or a fine of up to $1 million.
- Bank Fraud. Up to 30 years in prison and/or a fine of up to $1 million.
- Tax Evasion. Up to 5 years in prison and/or a fine of up to $100,000 for an individual and $500,000 for a corporation.
- Making False Statements to Federal Agents. Up to 5 years in prison and/or a fine
Get Help from an Experienced PPP Loan Fraud Attorney
If you believe you are under investigation for PPP loan fraud or you have already been charged with a criminal offense associated with PPP loan fraud, it is imperative that you consult with an experienced PPP loan fraud attorney right away. The complex nature of the PPP loan program made it difficult for everyone involved to navigate. It also means that business owners who did not knowingly engage in wrongful conduct may be mistakenly targeted in fraud investigations.
Consult with a PPP loan fraud attorney at Haas Law immediately to ensure that your rights are protected throughout a PPP loan fraud investigation and prosecution. Let us put our extensive experience, vast resources, and dedication to work defending you, your business, and your future
Call us at 407-755-7675, chat with us online, or submit our online form today. 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, allowing you to schedule an appointment as soon as possible to discuss your legal options.