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Investigations Into PPP Loan Fraud

Investigations Into PPP Loan Fraud | Heath Hyde Attorney

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Have you been contacted regarding a PPP loan fraud investigation? Heath Hyde can assist you.

Investigations into PPP loan fraud are on the rise across the country. In an effort to recover money gained fraudulently from COVID-19 assistance programs, federal prosecutors and criminal investigators from multiple federal agencies are actively searching for probable PPP loan fraud, EIDL loan fraud, and other CARES Act crimes.

Our firm has assisted people in resolving PPP fraud investigations, with many of them avoiding criminal penalties. We contact the investigators and any prosecutor assigned to the case as soon as we are retained to defend someone in a PPP or EIDL loan fraud case.

We strive to figure out why our client is being investigated and what evidence the government has against them. We then collaborate with our client to evaluate all relevant documents (sometimes with the help of forensic accountants) to see if we have a strong defense to any fraud charges.

We then tell the government of the client’s predicament and provide information that the agents or prosecutor may not be aware of. We are frequently able to assist our clients in avoiding criminal prosecution. We assist our clients in reaching the best possible resolution or contesting the case in court where charges have already been filed.

We know what rules and procedures apply to these cases, and we know what the government is looking for, because our firm has assisted clients in PPP and EIDL fraud investigations all around the country. Other lawyers just do not have the experience that our defense lawyers do in these investigations.

What does PPP loan fraud entail?

When an individual or corporation submits fraudulent information in an application or certification for a loan through the federal Paycheck Protection Program, this is known as PPP loan fraud (PPP).

The PPP was established to assist businesses in remaining operational during the coronavirus epidemic by granting forgiven loans to cover payroll and operating costs. Businesses can apply for PPP loans through commercial banks, but they must meet a number of requirements to be considered.

Even after receiving a PPP loan, a company must adhere to tight rules and limitations on how the funds can be spent.

What occurs during a fraud probe over a PPP loan?

The goal of a PPP loan fraud investigation is to see if charges should be filed against someone for violating one or more of the program’s rigorous standards. In general, federal prosecutors have been pursuing companies and individuals who may have breached the PPP loan program by:

  • Providing incorrect information on the PPP loan application
  • Loan stacking (applying for PPP loans from numerous lenders).
  • Using PPP loan funds for an unauthorized or improper purpose
  • Making a fraudulent PPP loan forgiveness certification
  • Lying to agents about PPP loans during an audit or investigation

A person accused of PPP loan fraud could face harsh criminal and civil consequences. Although there are various criminal statutes that may be involved in a PPP loan fraud prosecution, the following are the most prevalent criminal charges:

Wire Fraud (18 USC Section 1343) — This is when someone steals money by making fraudulent representations or promises over “the wires” (which includes the internet or the phone). The sentence ranges from 10 to 20 years in prison, depending on the amount of money seized.

Bank fraud is similar to wire fraud in that it involves making false statements to a bank or other financial organization. A violation of this legislation can result in a prison sentence of up to 30 years.

False Statements to a Financial Institution (18 USC Section 1014) – Lying to a bank or other financial institution is criminal under this legislation. False assertions on a loan application or in documents given to the bank to qualify for the loan are common examples. It carries a maximum sentence of 30 years in jail. (In Congress, the banks have excellent lobbyists.)

Conspiracy to Commit Fraud (18 U.S.C. Section 1349) — This legislation makes it a federal criminal to engage into an agreement to violate federal fraud laws, even if no money is taken or a false statement is made. Conspiracy carries the same penalty as the fraud offence that the agreement is intended to prevent.

What should I do if a PPP loan fraud inquiry is launched?

Investigations Into PPP Loan Fraud | Heath Hyde

If you’ve been contacted by a federal agent or other government official regarding a PPP loan, proceed with caution. In recent cases, persons who choose to speak with investigators without a lawyer were charged with obstruction of justice or making a false statement to the agents, in addition to PPP loan fraud.

We urge our customers to call us first before speaking with a federal agent about their loan application or business, and especially before agreeing to submit any documents or business records to the government.

Several people have contacted us after the government blocked or seized their bank accounts as part of a PPP loan fraud probe.

Don’t be alarmed if this happens to you.

The seizure of a bank account does not automatically imply that criminal proceedings will follow. However, there are actions you must do right once to reply to this action if you want to fight the seizure or avoid criminal penalties.

We feel that being proactive is the best approach. Don’t expect the problem to go away if you ignore it. The fact that money have been blocked indicates that a criminal investigation is likely ongoing.

In a PPP loan fraud investigation, being proactive can help you avoid criminal charges. Despite the fact that multiple criminal proceedings are currently underway, federal grand juries are currently constrained because to widespread coronavirus prohibitions.

That means a skilled federal defense attorney can help lead the case toward a civil resolution – such as restitution and a fine – rather than federal criminal charges.

If you’re worried about PPP fraud accusations, you should hire an expert federal defense attorney and take these common-sense precautions to protect yourself and your company:

1. Make a digital copy of all of your business and personal financial records. These will be required to support your defense and document your loan request.

2. Do not dispose of, shred, or otherwise destroy any business records, particularly those utilized to create your loan application or certifications. Not only might you need these documents later, but destroying any crucial document in advance of a PPP loan fraud investigation could result in a separate criminal charge.

3. Inform all of your employees that they can report any PPP fraud concerns to management without fear of retaliation. If they don’t believe they can talk to you, they may turn to the government or a whistleblower attorney. Even if there has been no breach of the PPP regulations, this can lead to an expensive investigation.

What Can Our Firm Do to Assist?

Our attorneys, seasoned paralegals, and independent consultants have a lot of expertise guiding business owners through PPP and EIDL loan fraud investigations.

When we are recruited to represent a client, we contact any investigators or government agents involved in the case right away to ensure that our client is not contacted again. We’ll also contact any financial institutions that may be holding funds for the company or individual in question.

Depending on the details of the case and the stage of the investigation, we perform the following extra steps:

1. Request all loan applications and accompanying paperwork from the company and evaluate them for any apparent problems.

2. Gather and save all pertinent business documentation that support the necessity for the loan or the intended use of the cash.

3. If a CPA, accountant, or financial advisor was employed or contacted in the loan application, interview them.

4. Interview any relevant personnel who may be able to support the need for the loan or the use of cash with the approval and consent of the business owner.

5. Meet with a forensic accountant who is often engaged by our firm to analyze the company’s financials and offer an opinion on the information in the loan application.

6. If appropriate, present any accessible mitigation or error reasons to government agents, investigators, or prosecutors in order to create a repayment or other resolution of the problem.

PPP loan fraud cases and developments are being actively monitored by our federal defense attorneys. We’ve previously given our customers advice on how to deal with these inquiries and avoid criminal prosecution.

Call us now for a confidential consultation if you have been charged with PPP loan fraud or believe you may be the focus of a PPP loan fraud investigation.

Throughout the United States, we have successfully represented clients in federal criminal trials. Our firm has offices in Atlanta, Alexandria, and Washington, DC, and we routinely travel to other federal courts to represent persons charged with significant federal crimes.

Investigations into PPP Loan Fraud: Recent Developments

Recent PPP loan fraud convictions indicate that the Department of Justice is dedicating a significant amount of time and money to these investigations. The SBA Office of Inspector General has published a report noting “severe concerns” about potential fraud in its coronavirus relief disaster loan program.

While PPP loan fraud is being prosecuted across the country, the Special Inspector General for Pandemic Recovery (SIGPR) and the United States Attorney’s Office in the Eastern District of Virginia have joined forces to pursue businesses and individuals that apply for PPP loans. As a result, we anticipate a surge in prosecutions in the Eastern District of Virginia, where our company has handled a number of criminal and civil matters.

At a press briefing, the Acting Assistant Attorney General discusses recent DOJ enforcement of PPP criminal fraud cases. The Fraud Section of the Criminal Division will lead the endeavor, which will be coordinated on a national level. As the government seeks to cast a wide net, this signals aggressive enforcement and the possibility of flimsy cases.

The Justice Department has filed charges against 57 people for alleged PPP fraud totaling $175 million. Without providing any specifics, the Department claims that “criminal rings” are behind the scam.

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Heath represents clients in all stages of federal investigations, from initial notice to trial and appeal. Most clients approach Heath in times of crisis, typically after being notified of a criminal investigation or an indictment. Don’t hesitate to get in touch with the Experienced Federal Criminal Defense attorney at Heath Hyde for a free consultation 24/7.