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U.S. Department of Justice (DOJ) Pursuing Investigations to Combat PPP Loan Fraud
The Paycheck Protection Program (PPP) was created in response to the economic hardships inflicted on companies by the COVID-19 pandemic. The program was designed to provide forgivable, federally-backed loans to assist companies in paying their employees during the crisis. Unfortunately, the program became a prime target for fraud. It is widely suspected that a significant portion of the hundreds of millions of dollars in loans issued were obtained by ineligible companies and individuals. Additionally, it is suspected that many loan recipients have used their loans for business and personal expenses that were not qualified for the forgiveness program.
To combat this, the DOJ is actively pursuing investigations targeting PPP loan fraud. Federal agents are working to uncover evidence of fraud, and the DOJ is issuing criminal complaints and pursuing charges for a broad range of federal offenses.
Are You Facing a DOJ Investigation for PPP Loan Fraud? Here’s What You Need to Know
If your company is suspected of PPP loan fraud and is being targeted in a DOJ investigation, it is important to understand the gravity of the situation. Facing a DOJ investigation for PPP loan fraud can have serious consequences for companies, their owners and executives, and others. Here’s what you need to know:
The DOJ is Intent on Prosecuting Individuals and Companies for PPP Loan Fraud
The DOJ is aggressively targeting individuals and companies suspected of submitting false loan applications and using PPP loan funds improperly. This is due to the substantial cost of Paycheck Protection Program loan fraud, as well as the widespread publicity of fraud targeting the PPP. As the DOJ stated in a recent press release, “Our office will be aggressive in targeting anyone who defrauds this critical program.”
The DOJ is Actively Pursuing Charges in Numerous PPP Loan Fraud Cases
The risk of facing a DOJ investigation is not theoretical; the DOJ has already filed charges in many cases. It has charged individuals with creating shell companies and falsifying payroll information to obtain PPP loans, using PPP funds for personal expenses, attempting to obtain multiple PPP loans, and other forms of PPP loan fraud.
The DOJ is Working with Other Federal Law Enforcement Agencies to Target All Forms of PPP Loan Fraud
The DOJ is working with other federal agencies committed to identifying and prosecuting individuals and companies that have unlawfully taken advantage of the forgivable, federally-backed loans offered under the PPP. The other federal agencies working with the DOJ to investigate and prosecute PPP loan fraud include the U.S. Small Business Administration Office of Inspector General (SBA-OIG), Federal Deposit Insurance Corporation Office of Inspector General (FDIC-OIG), Federal Bureau of Investigation (FBI), and Internal Revenue Service Criminal Investigations (IRS-CI).
Many Potential Defenses are Available to Individuals and Companies During DOJ PPP Loan Fraud Investigations
Facing allegations of PPP loan fraud can be a daunting task, but there are many potential defenses to these allegations. There are defenses specific to the Paycheck Protection Program and that apply based on the specific charges being put forward under the statutes. Some of the types of defenses that individuals and companies may assert during DOJ PPP loan fraud investigations include:
Paycheck Protection Program Compliance – Providing documentation of compliance can lead to a quick resolution. However, companies need to be very careful when providing information to the DOJ as inadvertently disclosing incriminating information could increase the risk of prosecution for PPP loan fraud.
Lack of Intent to Defraud – Criminal culpability at the federal level requires intent to defraud. Inadvertently obtaining a PPP loan, using PPP funds improperly, or submitting a fraudulent forgiveness certification may provide a defense to the charges.
Potential Charges in Federal PPP Loan Fraud Investigations
Fraud under the PPP can trigger civil and criminal charges under numerous pre-existing federal statutes. Potential charges in federal PPP loan fraud investigations may include (but are not limited to):
Making False Statements to the Small Business Administration (SBA) (18 U.S.C. § 1014)
Making False Statements to an FDIC-Insured Bank (18 U.S.C. § 1014)
Bank Fraud (18 U.S.C. § 1344)
Wire Fraud (18 U.S.C. § 1343)
Aggravated Identity Theft (18 U.S.C. § 1028A)
Tax Evasion (26 U.S.C. § 7201)
Making False Statements to Federal Agents (18 U.S.C. § 1001)
Conspiracy (18 U.S.C. § 371 and 18 U.S.C. § 1349)
Attempt (18 U.S.C. § 1349)
False Claims Act Violations (31 U.S.C. §§ 3729 – 3733)
How Todd Spodek Can Help
If you or your company is being accused or investigated for PPP loan fraud, Todd Spodek can provide the assistance you need. Our attorneys are experienced in defending individuals and corporations facing a variety of white-collar criminal charges. We will work tirelessly to protect your rights and provide an exceptional legal defense. Contact Todd Spodek today to learn more about our services.
Very diligent, organized associates; got my case dismissed. Hard working attorneys who can put up with your anxiousness. I was accused of robbing a gemstone dealer. Definitely A law group that lays out all possible options and alternative routes. Recommended for sure.
- ROBIN, GUN CHARGES ROBIN
WE'RE HANDLING SOME OF THE LARGEST PPP FRAUD CASES NATIONWIDE