On March 27, 2020, congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act to provide various benefits to individuals and companies affected by the COVID-19 pandemic.
Paycheck Protection Program (“PPP”) Loan Fraud
Many federal programs have the potential to lead to allegations of federal fraud steaming from various acts and omissions in relation to the Paycheck Protection Program. Many companies have already faced audits and investigations related to their receipt of PPP loan funds by the FBI and or DOJ.
Examples of Federal PPP or SBA Loan Fraud
Common examples of federal PPP or SBA loan fraud include:
- intentional misrepresentations;
- inadvertent mistakes that still resulted in the improper receipt of federal funds;
- filing fraudulent SBA/PPP loan claims;
- using funds for using funds received through PPP/SBA loan for ineligible business purposes; and/or
- concealing certain Information on the PPP or SBA loan application.
PPP and Small Business Administration (“SBA”) Loan Application Fraud
The PPP loan application contain eligibility criteria in order to receive a PPP or Small Business Administration (“SBA”) loans. Businesses that misrepresented information on their PPP or SBA loan applications to fraudulently claim face serious penalties. Filing fraudulent SBA or PPP claim application may face prosecution and investigations by the FBI and DOJ. Common misrepresenting information include:
- Misrepresenting the company’s payroll costs;
- Misclassifying employees as independent contractors;
- Falsifying the number of employees employed by the company
- Using SBA loan funds for purposes other than “sound business purposes”;
- Falsifying that you have been in business for at least two years in order to qualify for an SBA loan
PPP or SBA Loan Fraud Audit or Investigation
If you or your company is under investigation or being audited for PPP or SBA loan fraud, it is imperative that you do the following:
- Avoid making any misrepresentations or concealing pertinent information;
- Avoid making false statements regarding your PPP or SBA loan;
- Seek help from a federal fraud defense attorney
Due to the serious nature of federal fraud charges, it is vital that you seek the help from a Federal fraud defense attorney as soon as possible.
Federal PPP and SBA Loan Fraud Defense Attorney
If you are facing federal PPP or SBA loan fraud, we invite you to contact our federal PPP and SBA fraud defense attorney today at (213) 401- 2777 for a free consultation and case review.