How Businesses Can Respond to PPP Loan Fraud Investigations

Paycheck Protection Program (PPP) loans were established as part of the national COVID-19 response in the United States, under the CARES Act (the Coronavirus Aid, Relief, and Economic Security Act). 

Numerous businesses took advantage of these loans to help them through the tough economic times that resulted from the pandemic. Others claimed these PPP loans without good cause, and are now facing investigations or charges suggesting that their loan claims were fraudulent. 

If you have made a PPP loan claim, it’s important to know when and if you may be being investigated so that you can respond appropriately.

What Are PPP Loans Used For?

PPP Loans can be used to ensure that payroll employees do not need to be laid off, to pay business rent or property mortgages, and other business fees like utilities. Many businesses claimed these loans in the economic fallout of COVID-19, and numerous loans were granted rapidly without significant amounts of oversight. 

This means that now that the economic panic has died down, many of these loans are being investigated to ensure that they were valid. Making a false loan application is a criminal offense, and you can be imprisoned or face serious fines if you have done so. 

It is critical that if you have made a fraudulent PPP loan claim, or are being investigated for a fraudulent claim, get in touch with a lawyer straight away.

How Can You Know You Are Being Investigated?

There are some key signs that you can look out for to determine whether you are being investigated for PPP loan fraud. If you notice any of these have occurred, contact a lawyer immediately:

  • Your bank accounts or assets have been frozen
  • Your bank notifies you that your accounts have been frozen or that you cannot access your funds

There are several potential mistakes on your PPP loan application or actions that you could have taken to have led to the investigation. For example, it is fraudulent to:

  • Make false statements on your PPP loan application documents
  • Using the PPP loan for purposes other than what it was approved for
  • Applying for multiple loans
  • Using false documents during the process to prove your claim

What Steps Can You Take If Investigated For PPP Loan Fraud?

If you are being investigated for PPP loan fraud or you believe your business to be, you can take steps to mitigate the impacts. In addition, it is possible in many cases that the investigation is incorrect, and you may need to show further information to investigators to prove your innocence. 

For example, it is helpful if you can show that:

  • Any fraud was unintentional. For example, if the inconsistency or mistake on your application was a genuine mistake rather than an intent to defraud.
  • How you spent the PPP loan was reasonable or genuinely intended to fit within the loan application. This could be that you applied for the loan to cover staff payroll costs, but you also spent it on staff training or something related, with the genuine belief that the purposes were connected.
  • Your loan was applied for truthfully, and that you can show your spending was in line with the application. This may be simply a case of proving that you have done everything as expected.

In all cases, do not hesitate to contact a lawyer. This can save you a lot of trouble and help to ensure that any investigation goes smoothly. If you are found to have applied for or used a loan fraudulently, your lawyer can help to defend your case. 

Call Stechschulte Nell For Help 

If you are a business that is being investigated or has been charged with fraud relating to PPP loans, the law office of Stechschulte Nell can advise you. Don’t wait. Call our top-rated Tampa, FL law firm at (813) 280-1244 to speak to an experienced federal defense attorney. We’re available 24/7 to take your call.

To learn more about how we can help

Contact us Today