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Wichita PPP and EIDL Loan Fraud Lawyers
As the nation grapples with the devastating effects of the Covid-19 pandemic, small businesses have been hit particularly hard. In an effort to provide much-needed financial relief, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which authorized over $950 billion in forgivable loans to help small businesses maintain their workforce, have access to working capital, and keep operations running normally.
However, as the government began distributing these loans, it quickly became apparent that a significant amount of money was being obtained fraudulently by parties who wouldn’t otherwise qualify. The Department of Justice has since launched a fierce crackdown on allegations of Paycheck Protection Program (PPP) loan fraud, dedicating entire sections to investigating and prosecuting these cases.
As a business owner facing PPP loan fraud charges, you may be feeling overwhelmed and unsure of how to proceed. It’s important to remember that you have legal options. You may argue that you did not intend to defraud, for example, by accidentally providing false information, or that the Small Business Administration made an error.
At our law firm, we understand the gravity of the situation and the potential penalties you may be facing, which may include severe fines, home detention, community confinement, paying the cost of prosecution, forfeitures, restitution, supervised release, and lengthy imprisonment. For immigrants, a fraud conviction can also have serious immigration consequences, such as deportation.
As soon as you retain our services, we will immediately begin gathering all the necessary information and evidence, reviewing your case, and reaching out to the federal prosecutor or agents assigned to your case to provide them with information that can have a positive impact on your case.
We understand the government’s strategies in PPP loan fraud cases and know how to use this knowledge to your advantage. We will work tirelessly to negotiate a resolution that doesn’t involve formal criminal charges, and if charges have already been brought against you, we will aggressively defend you in court.
Examples of PPP loan fraud may include loan application fraud, such as falsely claiming eligibility and misrepresenting information such as the number of employees vs. contractors and presenting inaccurate payroll costs to increase the loan amount; loan stacking, where an applicant receives PPP loans from multiple lenders; fraudulent loan certification, where applicants knowingly certify an inaccurate statement; using funds for ineligible purposes, such as using PPP funds for something other than payroll, mortgage interest, rent, and utilities; and concealing or misrepresenting information during an audit.
You may face charges such as making a false statement, bank fraud, and wire fraud, all of which carry severe penalties. It’s crucial that you have experienced legal representation on your side to fight these allegations and protect your rights and interests. Don’t hesitate to contact us and let us help you navigate this difficult time.
The Paycheck Protection Program (PPP) loan fraud is a federal crime that involves obtaining money through false pretenses as part of the CARES Act. In April 2020, small businesses affected by COVID-19 and with fewer than 500 full-time employees became eligible for relief under the CARES Act, allowing them to obtain up to $10 million to cover payroll, mortgages, rent, and utilities for eight weeks. The government would forgive the debt if the money was used for these “qualified expenses.” However, cheating the Small Business Administration (SBA) out of this stimulus money is a federal felony that carries potential prison time, fines, and repayment of the loan.
The PPP loan fraud is a federal crime under the Small Business Act, and the sentence depends on the specific offense. For example, making false statements or overvaluing securities is a felony that carries a punishment of $5,000 and/or 2 years in federal prison. Embezzlement is a felony that carries a punishment of $10,000 and/or 5 years in prison. In addition, the defendant will need to pay restitution.
Defenses to PPP loan fraud include arguing that the defendant had no intent to defraud or that the SBA made a mistake. For example, if a business owner accidentally provided false information on a loan application, they would not be criminally liable as they had no intent to defraud. If the SBA made a mistake, the business owner can argue that they were not guilty of fraud.
The record of PPP loan fraud can be sealed in some cases, but most federal criminal records are unsealable. Non-citizens convicted of CARES Act fraud are vulnerable to deportation as fraud involving more than $10,000 is an aggravated felony and a crime involving moral turpitude. Non-citizens facing criminal charges are encouraged to consult with legal counsel as soon as possible.
The PPP was created as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was signed into law on March 27, 2020. The PPP offered businesses up to $2 million in loans, with no interest or principal due for the first 12 months. The loans were guaranteed by the U.S. Small Business Administration (SBA) and were to be used for payroll, rent, utilities and other essential expenses. The program was immensely popular but faced accusations of fraud as the SBA’s Office of Inspector General issued 11 reports detailing widespread fraud and abuse in the PPP loan program.