The federal government enacted the CARES Act of 2020 in response to the disastrous economic consequences the COVID-19 pandemic inflicted on American businesses and workers. As part of the massive economic relief package, the Small Business Administration (SBA) oversaw the Paycheck Protection Program (PPP) which authorized hundreds of billions of dollars in low interest, potentially forgivable loans to businesses for payrolls and related expenses.
Now, the U.S. Justice Department is engaged in an intense campaign to find and prosecute anyone who received a higher amount of PPP loan money than they were eligible for and those who spent those funds improperly. The DOJ is devoting enormous resources to identify the big fish, the PPP loan abusers who obtained millions of dollars illegally and bought mansions, Ferraris, and jets. But no fish is too small for the US Justice Department to prosecute if PPP money was obtained or spent improperly.
Severe penalties, including substantial prison time, crushing fines, and asset forfeitures are facing anyone indicted for one or more PPP financial fraud crimes. (See some possible criminal charges below.)
If you think you are one of the people in Florida being investigated by any federal agency or the federal COVID-19 Fraud Enforcement Task Force, you should contact a certified criminal lawyer experienced in PPP fraud cases right now. At the Stechschulte Nell Law Firm, our team of PPP fraud defense lawyers will take the proactive steps necessary to get out in front of any ongoing federal investigation.
There are immediate measures a federal criminal defense lawyer can take to protect you from indictment if contacted early. Don’t wait for investigators to knock on your door in Florida. Contact Stechschulte Nell for your consultation today at 813-240-1244.
Acts that Could Trigger Federal PPP Fraud Investigation
While the Department of Justice PPP Fraud Task Force is trying to identify and prosecute the biggest PPP loan frauds, no one who falsified information or used a false identity to obtain any PPP funds is safe from a federal indictment.
Eligibility requirements for a valid PPP loan were spelled out during the application process. If someone unintentionally overstated their need or was confused about some aspect of their eligibility when they applied for or used the loan proceeds, and the sum involved is relatively small, then they should contact a criminal defense lawyer to determine the best way to address their errors. An experienced federal criminal defense lawyer should be able to protect them and help resolve their issue safely.
If the government can prove you knowingly committed one of the acts listed here, you need to work closely with an experienced federal financial fraud and PPP fraud criminal defense lawyer as soon as possible:
Using PPP loan funds for unauthorized purposes violates the law and is one of the most easily proven offenses that attract a lot of attention. An indictment can be based on the intentional misuse of PPP funds even if you did not misrepresent any facts and you were eligible to receive the loan funds. The PPP loans were to be used exclusively to pay for the following:
- payroll expenses
- employee benefits (health insurance, taxes, family leave, retirement funds, etc.)
- interest only on a mortgage or other business-related debt
But people who received PPP loans had financial pressure in their personal life as well. While it may have been tempting to do so, spending any PPP loan funds on personal living expenses, recreation, vacations, travel, jewelry, cars, boats, planes, luxury items like watches, or any other such use may be viewed by federal prosecutors as grounds for indictment.
- Applying for more than one PPP loan using different identities will be grounds for indictment. One reported case listed more than 1,300 different businesses using the same address, all fraudulent, but each one received PPP loan money.
- If you knowingly provided any false information to the bank to obtain a PPP loan, and if any electronic device was used in the process to convey information, the indictment would be for bank fraud, wire fraud, and if applicable, mail fraud.
- If you exaggerated the size of your staff and their total payroll cost to get a bigger PPP loan than you were eligible for, then that action may lead to an indictment.
- When you obtain money unlawfully and try to deposit it or make it appear that it was obtained legally, the federal crime is called money laundering.
- Using another person’s name or identification information to obtain a PPP loan is identity theft. If they agreed to let you use their identity, then both of the parties can be indicted for conspiracy to commit multiple federal felonies. Identity fraud charges include a mandatory 2-year prison sentence to be served following any other sentence imposed.
- Were you questioned recently by federal agents about your loan? Did you tell them anything untrue? If so, making a false statement to a federal government investigator is a felony.
Possible Charges in PPP Indictments
PPP loans were obtained from banks based on the US. Government’s guarantee of reimbursement. Those who applied for PPP loans did so online using computers. The information given to lenders may have included emails, texts, or telephone calls.
How serious can PPP fraud-related charges be? The possible crimes for which an indictment could be issued based on the method used to file a person’s PPP loan application include the following:
Penalty: Up to 30 years in prison plus up $1,000,000 fine
- Bank Fraud (18 U.S. Code § 1344)
- Wire Fraud (18 U.S. Code § 1343)
- Mail Fraud (18 U.S. Code § 1341)
Penalty: Up to 20 years in prison plus up to $500,000 fine (or 2 times the value of money laundered)
- Money Laundering (18 U.S. Code § 1956)
Penalty: Up to $250,000 fine plus up to 5 years in prison
- Conspiracy to Defraud the Government (18 U.S. Code § 371)
- Tax Evasion (26 U.S. Code § 7201) [$100,000 fine + 5 yrs.]
- False Statement to a Federal Government Agent (18 U.S. Code § 1001)
- Obstructing of Criminal Investigation (18 U.S. Code § 1510)
Penalty: Mandatory Minimum 2 years in prison consecutive to other federal crime sentences
- Identity Fraud (18 U.S. Code § 1028)
How a PPP Fraud Defense Lawyer Can Help
Any contact with federal law enforcement should be guided by an experienced federal criminal defense lawyer. When the federal investigators pay you an unannounced visit, you will be extremely nervous if you are not prepared. Nervous people often make bad decisions.
Early contact with a PPP defense lawyer near you at Stechschulte Nell, Attorneys at Law will enable you to achieve these goals:
- You will know what to say, and what not to say, if federal law enforcement agents from the FBI, the IRS, or the DOJ PPP Fraud Task Force contact you,
- Organizing and arranging for a financial analysis of all the documents related to your PPP application, your business, the purposes for which you used PPP funds, and other relevant evidence,
- If appropriate in your case, arranging for a civil settlement of any federal claims without any criminal implications,
- If the evidence indicates that you are exposed to indictment and unlikely to obtain a non-criminal resolution, experienced criminal PPP fraud defense lawyers begin to identify exculpatory information and will ensure you are prepared for each event that may occur,
- You will learn how to invoke your right to remain silent if federal law enforcement agents contact you or ask you to speak with them. It may sound like a simple act, but your impulse to politely answer questions put to you in a friendly manner needs to be overcome by practicing.
- Stechschulte Nell lawyers will instruct you not to delete, dispose of, or destroy computer data or any other documents relevant to the PPP loan funds because doing so could lead to a federal indictment for obstructing a federal investigation.
- You will learn how many federal defendants avoid indictment for underlying felonies but end up being convicted of making false statements to federal agents.
Charged With PPP Fraud?
If you were contacted by federal authorities or believe you may be the subject of any federal investigation in the state of Florida related to the Payroll Protection Program (PPP), contact the PPP defense lawyers at Stechschulte Nell today for a consultation today; 813-240-1244.