PPP Loan Fraud
When the US was in the grip of the first waves of the COVID-19 pandemic, the government established Paycheck Protection Program (PPP) loans. However, there were ways to defraud the system, which quickly led to the need for specialized legal assistance, like PPP loan fraud lawyers in California.
PPP loans, also known as forgivable loans, saved literally hundreds of thousands of small businesses from foreclosure as the economic effects of the lockdown made themselves known. Now, if you’re facing PPP loan fraud accusations, LibertyBell Law Group can give you the best legal representation.
Get in touch to find out how our expert PPP loan lawyers can help you face charges of potential fraud.
What is PPP Loan Fraud?
There are a few ways to commit Paycheck Protection Program loan fraud. For example, you commit this when you submit a fraudulent loan application.
Fraud also occurs when you don’t spend the loan money as the loan program states. Applying for PPP loan forgiveness under false circumstances also counts as PPP loan fraud.
A Brief Outline of What PPP Fraud Is
Companies and individuals can be charged with PPP fraud if they:
- Lied on the application
- Number of employees is fewer than 500
- Misclassification of employees as independent contractors
- Misrepresenting their small business eligibility
- Lied about the payroll cost to secure a bigger loan
- Applied for PPP loans from several financial institutions, known as loan stacking
- Used the money for purposes other than those stipulated
- Submitted false certification for PPP loan forgiveness applications
- Lied to federal agents during a PPP loan fraud audit
How is PPP Loan Fraud Investigated?
Four federal agencies within the federal government are investigating PPP loan fraud.
The Small Business Administration, Office of Inspector General
They investigate PPP loan fraud on a case-by-case basis. The Office of Inspector General (OIG) isn’t a law enforcement agency and doesn’t have a criminal division as such, but if you’re investigated by the Small Business Administration (SBA), there’s a good possibility that you will be charged with a federal crime.
The Federal Bureau of Investigation
The Federal Bureau of Investigation (FBI) investigates all types of federal fraud, including white-collar crimes such as Paycheck Protection Program loan fraud. The agency looks for any signs of fraud committed by a person or business entity that uses the PPP loan for illegal acts.
The Department of Justice
The Department of Justice (DOJ) targets and prosecutes those who are suspected of PPP loan fraud. The DOJ can file several different charges simultaneously, including bank fraud, wire fraud, identity theft, and more.
The Internal Revenue Service
The Internal Revenue Service (IRS) gets involved when fraud alerts point them to suspects who underreport or underpay federal tax liabilities. The IRS Criminal Investigation division targets individuals and business entities that present a fraud risk and are suspected of tax evasion and PPP fraud.
Step-by-Step PPP Loan Fraud Investigation
The first step in federal and civil investigations is to check and verify the documents the accused provided. If necessary, investigators can subpoena your bank to get your bank statements, especially if they have already aroused the suspicion of potential fraud schemes.
Discrepancies between the submitted statements and the actual statements result in automatic charges of fraud. The IRS just has to verify the number of employees you reported in the previous two years against the number of employees claimed on the loan application. Discrepancies can result in automatic fraud charges.
Investigators can contact the employees listed to ensure they really exist. Your accountant might also be brought into action, especially if they assisted in the submission of the fraudulent application and can be charged as a co-conspirator. At the least, they could be investigated to find compromised accounts across their client base.
At this point, you ought to contact LibertyBell Law Group and engage the services of one of the most reputable and successful PPP loan fraud lawyers in California.
What are the Legal Penalties for PPP Loan Fraud in California?
PPP loan fraud is a serious crime, and it carries serious penalties. For example, you can be charged with making false statements to a federal agency, making false statements to the SBA, making false statements on a loan application, and bank fraud.
As a business owner, you could be looking at anything from five years to 99 years in prison. There is also a possible $1 million fine.
To the fullest extent of the law, straightforward PPP loan fraud penalties include a fine of up to $250,000, up to five years in prison, or both. Furthermore, you may have to repay the total loan amount on top of the other penalties.
If you think you’re under suspicion for PPP loan fraud, contact LibertyBell Law Group. Our trial lawyers are thorough when it comes to preparing for your trial, especially as far as pre-trial prep is concerned. You’ll never have a more prepared defense team on your side.
What to Do if You’re Being Investigated for PP Loan Fraud?
One of the most important things you should do is not panic! It can be intimidating when federal law enforcement agencies make it known that you are a suspect or bring you in for questioning.
Try not to make any statements until you’ve consulted with your attorney. If you do make statements in the heat of the moment, they can be used in court against you. You have a right to an attorney. Exercise that right and contact LibertyBell Law Group’s PPP loan fraud lawyers in California.
Don’t volunteer to provide officials with your PPP loan documentation. Let them get a search warrant if necessary. Don’t take any action until your PPP loan fraud attorney arrives.
It’s possible your bank account might be frozen as part of the investigation. Don’t panic, it’s usually part of a standard investigation, although it does imply that they could be getting ready to file charges against you.
Your attorney will give you options that might enable you to evade criminal charges. For example, as the accused, you could pay back the loan as well as the fine to avoid federal criminal charges. It might not seem like the best option at the time, but if 99 years in prison is a likely sentence, it’s probably a good idea to take the repayment option.
As a side note, if you are going to be investigated, inform all your employees so they know what to expect. The rumor mill can be far worse than transparency, so go with the truth as you see it.
Choose the Best PPP Loan Fraud Lawyers in California from LibertyBell Law Group
A PPP loan fraud conviction will play havoc with your life. Unless your family is incredibly supportive, you run the risk of facing the whole ordeal on your own, and that’s before the effects on your career are taken into consideration.
These are just two reasons you need a team of experienced lawyers who can minimize the potential penalties, secure favorable settlements, and even get the charges against you dismissed.
LibertyBell Law Group’s primary purpose is to keep you out of federal prison. We will work tirelessly on your behalf to ensure we reach that goal.
To secure the best PPP loan lawyers in California who will always have your best interests at heart, complete our online form to get top legal services and advice from California’s best criminal defense team. You may also call 855-520-0338 at LibertyBell Law Group today!
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