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What to Do If You are Under PPP Fraud Investigation

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    What to Do if You are Under PPP Fraud Investigation

    The Paycheck Protection Program (PPP) is a new loan program established under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was signed into law on March 27, 2020, yet the federal government has already filed criminal charges against more than a dozen individuals in 11 states suspected of defrauding the program. The Department of Justice has vowed to pursue federal charges against those suspected of exploiting the coronavirus pandemic in an attempt to commit fraud, and the United States Attorney General has directed all U.S. Attorneys to prioritize the investigation and prosecution of fraud crimes related to COVID-19. If your business is under federal investigation for PPP fraud, you are not alone. Our PPP fraud attorneys have extensive experience representing clients in federal cases and we will stand by your side and advise you every step of the way.

    Hire a Skilled PPP Fraud Attorney Right Away

    The very best thing you can do to protect yourself if you are under investigation for PPP fraud is to secure qualified legal counsel as quickly as possible. Your entire future are at stake when facing allegations of fraud in connection with the Paycheck Protection Program and a knowledgeable federal criminal defense attorney can help protect your rights, your freedom and your reputation. While the Department of Justice has already begun to aggressively investigate PPP fraud and pursue charges against individuals and businesses suspected of defrauding the federal loan program, it is still possible to resolve allegations of PPP fraud at the investigative stage before formal criminal charges are filed, so don’t wait to call our firm.

    What is the Next Step?

    If your company is under federal investigation for fraud in relation to the Paycheck Protection Program, you have probably received a subpoena, a target letter, a criminal complaint, a civil investigative demand, or some other form of investigative inquiry connected to allegations of PPP fraud. Once you have hired a PPP attorney, your attorney can advise you on how to proceed through each step of the investigation based on the individual facts of your case. Depending on your specific situation, your attorney can assist you in the following areas.

    Meeting any investigative deadlines

    Not all investigative requests impose deadlines on the respondent, but some do, and it is critical that you do not let these deadlines lapse without submitting a response. When you hire our PPP attorneys, we will carefully review any inquiries you receive and work with you to put together a timely and compliant response.

    Conducting an internal audit or investigation

    Upon discovering that your company is involved in a federal PPP fraud investigation, one of the first things you should do is conduct your own internal audit or investigation. This can help uncover any potential evidence of PPP loan fraud that the federal government could discover during its investigation, such as:

    • False or misleading information included on your company’s PPP loan application
    • Lack of supporting documentation for certifications made on your company’s loan application
    • Use of PPP loan funds for unauthorized purposes
    • False or misleading information included on your company’s loan forgiveness application
    • Lack of supporting documentation for certifications made on your company’s loan forgiveness application

    Our knowledgeable PPP fraud attorneys can manage your internal audit and ensure that you have a clear understanding of your company’s potential risk exposure with regard to the government’s PPP fraud investigation.

    Making an independent determination as far as your business’ PPP loan compliance

    You will use the information you find during the internal audit to make an independent determination of your company’s PPP loan compliance. If you find that your company fully complied with the terms and conditions of the Paycheck Protection Program, you can use this information to respond to the federal government’s inquiry. However, if the audit identifies any potential liabilities, such as evidence of non-compliance regarding the stipulations of the Paycheck Protection Program, or any acts or omissions that could result in criminal charges for PPP loan fraud, you will need to respond accordingly. Either way, it is a good idea to rely on the expertise of a federal criminal defense attorney when responding to a PPP fraud inquiry.

    Developing a strategy for dealing with federal investigators

    A number of federal agencies have joined together to identify and investigate allegations of PPP fraud and bring those accused of defrauding the Paycheck Protection Program to justice, including the Federal Bureau of Investigation (FBI), the Internal Revenue Service (IRS), the U.S. Small Business Administration (SBA) and the Federal Deposit Insurance Corporation (FDIC). Once you know which agencies are handling your investigation and what kind of information they are looking for, you and your defense lawyer can develop a strategy that moves you in the direction of reaching a favorable resolution to the federal investigation.

    Executing a defense strategy aimed at achieving a pre-charge resolution

    Whenever possible, our federal defense attorneys seek to resolve criminal allegations during the investigative stage, before charges are filed. It is our goal to execute a defense strategy in your case that is focused on achieving a pre-charge resolution, meaning the investigation is resolved before the federal government determines that it has enough evidence to take your PPP fraud case to court.

    Preparing a litigation defense strategy

    If it is too late to avoid criminal charges, your PPP attorney will focus instead on developing a strong litigation defense strategy. You never know how a fraud investigation will pan out, which is why you want a trial-tested defense lawyer on your side from the very beginning, in the event that your case proceeds to trial. Our knowledgeable PPP fraud attorneys have secured favorable results at trial for our clients, and favorable pre-trial results as well, and we will do everything in our power to help you get the best possible outcome in your case based on your specific circumstances.

    Facing Criminal Charges for PPP Loan Fraud

    PPP fraud is an example of a white-collar crime, meaning it is a financially motivated crime committed by a business or government professional, and while these types of offenses are non-violent in nature, the consequences of such a charge can be devastating. If you are under investigation for PPP fraud and the Department of Justice files charges against you for a federal offense like bank fraud or wire fraud, you could face a prison sentence of up to 30 years and a fine of up to $1,000,000 if you are convicted of the crime. Not only can a federal fraud charge result in severe criminal penalties upon conviction, it can also ruin your reputation, cost you your job and destroy your personal relationships, among other negative consequences. Facing criminal charges for defrauding the Paycheck Protection Program is a serious matter, one that requires the expertise of a skilled PPP fraud attorney.

    What Constitutes PPP Fraud?

    One of the most common acts that could expose your business to PPP fraud charges is submitting a fraudulent loan application for the purpose of illegally obtaining PPP funds. When you apply for funds through the Paycheck Protection Program, you are required to make several certifications, including the following:

    • You are eligible to receive a loan.
    • Current economic uncertainty makes the loan necessary to support ongoing operations.
    • The funds will be used to keep workers employed, maintain payroll and make eligible mortgage, lease and utility payments.
    • You have not and will not receive another loan under the PPP.
    • All of the information you provided in your application and all supporting documentation is true and accurate.

    Any bad-faith certifications made in an attempt to defraud the Paycheck Protection Program can lead to federal fraud charges. This includes fraudulently applying for and obtaining PPP funds, as well as fraudulently applying for loan forgiveness, as the PPP loan forgiveness application process also requires certain borrower certifications. Unfortunately, because of the ever-changing guidelines governing the Paycheck Protection Program, who is eligible for funds and how the funds can be used, even borrowers who have acted in good faith in applying for PPP loans and spending the money may be concerned about their potential exposure to federal investigations and criminal penalties for PPP fraud.

    How Our Federal Criminal Defense Attorneys Can Help

    In quickly initiating investigations in response to allegations of PPP fraud and charging alleged offenders, the Department of Justice is sending a clear message to others that such abuses of the Paycheck Protection Program will not be tolerated by the federal government. If your business has been targeted by a PPP federal investigation, retaining the services of a skilled federal criminal defense attorney should be your first priority. Fraud is a serious criminal charge and you will need to act quickly to protect your rights and mitigate the risks of a federal fraud investigation. Our accomplished PPP attorneys are well acquainted with the federal investigative and prosecutorial processes and we have represented hundreds of clients in cases at the federal level. With the right legal strategy, our attorneys may be able to help you avoid facing criminal charges altogether. Call us today for a free PPP fraud consultation.

    FAQ’s

    What if I am the target of a PPP fraud investigation?

    With billions of dollars at stake in the Paycheck Protection Program, the Department of Justice has vowed to aggressively investigate and prosecute cases of PPP loan fraud. If you believe you may be the target of a PPP fraud investigation, you could end up facing charges for federal bank fraud, wire fraud, identity theft, making false statements to a financial institution, and/or making false statements to the SBA. The best way to protect yourself against these charges is to hire a knowledgeable PPP attorney as soon as you suspect that you may be involved in a fraud investigation.

    Am I at risk for federal PPP loan fraud charges?

    If you are accused of fraudulently obtaining or misusing loan funds from the Paycheck Protection Program, you could face criminal prosecution for a federal offense. If you have questions about PPP loan compliance, or if you believe you may be at risk for federal charges related to PPP loan fraud, do not hesitate to consult an experienced federal criminal defense attorney. Read More FAQ’s

    What is PPP loan fraud?

    PPP loan fraud is any attempt to defraud the Paycheck Protection Program. There are three main ways to commit PPP loan fraud:

    • By misrepresenting information on your loan application in order to fraudulently obtain PPP funds,
    • By misusing PPP loan funds (i.e. using the funds for unauthorized purposes), or
    • By fraudulently requesting forgiveness of a PPP loan.

    Read More FAQ’s

    What is covered under “payroll costs”?

    For the purposes of calculating a PPP loan amount or determining eligibility for loan forgiveness, the term “payroll costs” refers to the total amount of any compensation paid to employees. This includes salaries, wages, tips, bonuses and commissions, plus vacation pay, sick leave and other employee benefits. These costs are capped at $100,000 per employee. Read More FAQ’s

    Is the loan forgivable?

    A PPP loan can be partially or fully forgiven so long as the business keeps its employees on the payroll (or quickly rehires employees who were laid off) and maintains employees’ salary levels. In order for the loan to be 100% forgiven, at least 60% of the loan amount must be used to cover payroll costs and employee healthcare benefits. The other 40% of the loan amount can be used for eligible business expenses. Read More FAQ’s

    How much funding can I receive?

    The amount of funding you can receive under the Paycheck Protection Program is based on your payroll costs. The loan amount is equal to 2.5 times your average monthly payroll costs, which can be calculated by adding up your payroll costs for all of 2019 and dividing this amount by 12. Read More FAQ’s

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