March 15th, 2022
Posted By
Hope C. Lefeber
ppp loan

The Department of Justice is cooperating with the FBI, the IRS, and the U.S. Small Business Administration Office of Inspector General (SBA-OIG) to aggressively target CARES Act fraud cases, and specifically cases involving PPP loan fraud. Prosecutors and federal investigators from various agencies are actively looking for cases of PPP fraud in efforts to recover money that may have been fraudulently obtained through various COVID-19 pandemic relief programs.

If you have been charged or believe you are under investigation for PPP loan fraud, you must act quickly and contact an experienced federal criminal defense attorney to protect your rights.

What is PPP Loan Fraud?

PPP loan fraud occurs when a person or business submits false information in an application for a small business loan through the Small Business Administration (SBA) under the Payroll Protection Program (PPP).

The PPP was created in 2020 under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to help companies stay in business during the coronavirus pandemic. The PPP provides forgivable loans that businesses can use to cover payroll and operative expenses. Businesses can apply for PPP loans through commercial banks but must meet certain eligibility criteria. Once a business obtains a PPP loan, it must follow strict requirements when spending the funds.

PPP Loan Fraud Investigations

During a PPP loan fraud investigation, federal investigators try to determine whether charges should be filed for violating PPP loan requirements. Federal investigators have targeted individuals and businesses who violated the requirements of the PPP by:

  • Making false statements on a PPP loan application
  • Applying for a PPP loan from multiple lenders (“loan stacking”)
  • Using PPP loan money improperly
  • Submitting a false certification for PPP loan forgiveness
  • Lying to federal agents during a PPP loan investigation

Charges Related to Paycheck Protection Program Fraud

Someone charged with PPP loan fraud is facing serious criminal penalties. Common criminal charges for PPP loan fraud include:

  • Mail and Wire Fraud. Under 18 U.S.C. §1343 it is illegal to use the internet or phone to steal money by making false statements or promises.
  • Bank Fraud. 18 U.S.C. §1344 identifies the crime of making false statements to a bank or other financial institution.
  • False Statements to a Financial Institution. Under 18 U.S.C. §1014 it is illegal to lie to a bank or other financial institution.
  • False Statements to Federal Agents. You could be charged with violating 18 U.S.C. §1001 if you intentionally or inadvertently make false statements during an investigation for PPP loan fraud.
  • Aggravated Identity Theft. Under 18 U.S.C. 1028A, it is illegal to use another company’s or individual’s information to fraudulently apply for a PPP loan.
  • Conspiracy to Commit Fraud. Under 18 U.S.C. §1349 it is illegal to enter into an agreement to violate the federal fraud laws, even if the person doesn’t actually take any money or make a false statement.

Responding to a PPP Fraud Investigation

If you are under investigation or have been charged with PPP loan fraud, you need to hire an experienced federal criminal defense attorney as quickly as possible. If you speak to a federal investigator and/or the IRS without a lawyer present, you could inadvertently say something that leads to your being charged with making false statements to federal agents in addition to the PPP loan fraud charges.

You may also find that your bank accounts have been frozen. If this happens, there are steps you can take to respond to the investigation, contest the seizure, and protect yourself from criminal charges.

You should also:

  • Gather personal and business records and make a digital copy of them. These will be necessary to document your loan request and prepare your defense.
  • Do not throw away, shred, or destroy any business or personal records, especially if you used them in your application for a PPP loan. You may need these documents in the future, and if you destroy them, you could be charged with additional crimes for destruction of evidence.

Contact Hope Lefeber for PPP Loan Fraud Defense

If you are under investigation or have been charged with a crime involving allegations of PPP loan fraud, act quickly and hire an experienced federal criminal defense attorney.

Philadelphia criminal defense lawyer Hope Lefeber has been defending people accused of financial crimes in federal court for more than 30 years. She began her career as an enforcement attorney with the United States Securities and Exchange Commission (SEC) where she learned first-hand how the government prepares and prosecutes federal fraud cases. Today, she uses that experience to defend people who have been accused of financial crimes in federal court.

Ms. Lefeber has extensive experience representing people accused of financial crimes. She has defended executives at Fortune 500 Companies, as well as lawyers, doctors, medical professionals, professors, students, and businessmen and women.

If you are under investigation or have been charged with PPP loan fraud, contact Hope Lefeber today to schedule a confidential consultation to discuss your case and how Ms. Lefeber can help.