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PPP Loan Fraud Lawyers

Covid-19 pandemic has affected many people and companies. Earlier this year, the CARES act was signed into law. The intention was to provide benefits to companies and individuals affected by the pandemic. One of the programs under the CARES act was the paycheck protection program (PPP). With almost $350 billion, the PPP goal was to provide loans to small-sized businesses affected by the Covid-19 pandemic.

Surprisingly, the PPP program exhausted its funds within a short period. Even though the applications were overwhelming, many eligible companies didn’t receive any financial relief. As a result, people are raising questions concerning PPP loan fraud. Therefore, companies that benefited from the program should expect a visit from the federal authorities.

If federal authorities are investigating you for PPP loan fraud, the chances are that you acquired the loan by pretense. The loan had favorable rates and was forgivable, depending on how you used the money. Your business must have less than 500 full-time employees to qualify for a loan.

What Is PPP Loan Fraud?

The federal authorities will investigate your business for fraud if you acquired a PPP loan, and you weren’t eligible. If the authorities discover that you cheated, you risk going to prison, paying fines, or repaying the loan immediately. Examples of PPP loan fraud include:

  • Inflating payroll cost to acquire more money
  • Claiming that you are going to use the loan for qualified expenses
  • Insisting that the pandemic has affected your small-sized business
  • Claiming that you have employed less than 500 individuals

There are many ways to commit PPP loan fraud. The charges you face mostly depends on the fraud you commit. The authorities might charge you with bank fraud, identity theft, wire fraud, and making false statements. If several people work together to acquire a PPP loan fraudulently, the authorities can charge all of them with conspiracy.

Penalties for PPP Loan Fraud

Even though PPP loan fraud is an offense, you can disapprove of the allegations. With the help of an attorney, you can prove that you had no intention to defraud. At times, filling loan applications can be a complicated and stressful procedure. Therefore, you are likely to fill in some of the information incorrectly.

Secondly, the SBA can make a mistake. Ensure that you keep records of emails, texts, and phone calls. The above will help you prove your innocence in case federal authorities accuse you of PPP loan fraud. You can also provide invoices and receipts to prove you aren’t lying when you apply for loan forgiveness. If you are a non-citizen, the chances of being deported are very high.

What Constitutes PPP Loan Fraud?

Like most federal programs, some acts or omissions can lead to federal authorities’ investigation. The following qualifies you for PPP loan fraud allegations:

Loan Stacking

It is whereby an individual applies and receives PPP loans from several lenders. The main focus will be on this type of fraud, mainly because the government can track how the lenders distributed PPP funds.

Application Fraud

There are eligibility criteria that one must follow to qualify for a PPP loan. Filling false information to be eligible for a PPP loan is exercising fraud. Misinterpreting the following information is a crime:

  • The number of employees in your company
  • Classifying some of your employees as private contractors

Fraudulent Loan Certification

You must certify several facts to qualify for a PPP loan. The certifications must be made in good faith to avoid federal charges. It is a must that you prove the following facts:

  • You will only use the funds to maintain payroll, retain workers, make utility payments, or pay a mortgage.
  • You will not apply or receive another PPP loan.
  • You will only provide accurate information and supporting documents.
  • You will use the loan to support your business during the covid-19 crisis.

Using the PPP loan for Other Purposes

You are committing fraud if you use PPP loans for purposes other than pay rent, cover payroll costs, pay utility bills, and pay mortgages. Therefore, you should document all payments, whether non-eligible or eligible. Using PPP loans for fraudulent purposes can lead to allegations of fraud.

Fraudulent Certification

If you qualify for a PPP loan, then you are eligible for loan forgiveness. However, to apply for loan forgiveness, you must the necessary documents to prove that you used the loan for authorized expenses. Additionally, you must certify that all your documents are accurate.

Misrepresenting Information during an Investigation

During an audit or an investigation, you should not misrepresent or conceal important information. However, ensure that you don’t disclose any potentially-harmful information. You are committing fraud if you withhold information or make false statements to federal authorities.

What to Do When Being Investigated For PPP Loan Fraud

If federal authorities are investigating you for PPP loan fraud, you should seek the help of a PPP fraud defense lawyer. It is not advisable to give any information to federal authorities without legal representation. A qualified federal criminal defense lawyer can help do the following:

  • Meet investigative deadlines.
  • Carry out an internal investigation.
  • Develop an effective strategy to help deal with investigators.
  • Develop a defense strategy to help achieve a pre-charge resolution.
  • Develop a litigation defense strategy, etc.

It is important to note that PPP loan fraud cases are not the same. Therefore you need to hire a lawyer capable of providing individualized attention. Choosing the right lawyer can be challenging. Fortunately, you can ask for recommendations from relatives or friends.

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