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Wyoming PPP and EIDL Loan Fraud Lawyers

4 April, 2023

Federal Loan Fraud Investigations and Criminal Liability: Understanding PPP Loan Fraud and SBA Loan Fraud

The COVID-19 pandemic has caused significant economic hardships for many individuals and businesses. To aid those affected, the US government created two federal financial programs as part of the CARES Act to help recipients during national disasters. These programs were the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) program.

However, as with all government programs, there is a risk of fraudulent activities. Several federal and state law enforcement agencies are currently investigating businesses and individuals who received funds illegally from either the PPP or SBA EIDL programs. If prosecuted or under investigation for loan fraud, it is essential to contact a reputable federal criminal defense lawyer immediately.

What is PPP Loan Fraud?

PPP loan fraud involves any act that fraudulently obtained or attempts to fraudulently obtain benefits from the Paycheck Protection Program. This includes:

– Disclosing false information on PPP loan applications
– Obtaining multiple loans from multiple SBA 7(a) lenders

Other actions that can result in allegations of PPP fraud include misrepresenting payroll, falsifying compliance with PPP terms, and using loan funds for purposes other than what was stipulated.

Potential Criminal Charges and Imprisonment

Several federal laws enable prosecutors to charge an individual or company with PPP loan fraud. These include False Claims Act (31 U.S.C. §§ 3729 – 3733), Making False Statements to an FDIC-Insured Bank (18 U.S.C. § 1014), Wire Fraud (18 U.S.C. § 1343), and Conspiracy (18 U.S.C. § 371). Those charged face a maximum prison sentence ranging from two years to 30 years depending on the statute applied. Maximum fines imposed reach up to $1 million. For businesses, fines can go up to $500,000 or twice the gain or loss.

Reducing the Risk of Criminal Liability

Businesses must ensure they have all the necessary documentation available to support PPP loan applications and certification. An excellent defense strategy is essential in avoiding criminal liability for PPP loan fraud allegations. A federal criminal defense lawyer can help respond to investigations by initiating attorney-client privileged internal assessments, developing comprehensive defense strategies tailored to specific circumstances, and engaging with law enforcement agents handling the matter to avoid prosecution whenever possible.

Conclusion

The risk of PPP loan fraud or SBA loan fraud has been prevalent during the COVID-19 pandemic, which posed unprecedented economic hardship for individuals and small/medium-sized businesses. If you are under investigation or prosecuted for such charges, it is crucial to consult an experienced federal criminal defense attorney to minimize penalties based on criminal statute violations.

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