Tampa PPPL Fraud Lawyer
In response to the COVID 19 pandemic, Congress established the Paycheck Protection Program, which made loans to businesses to keep employees on the payroll. With much of the country shut down to control the spread of the virus, the economy tanked. But PPP loans provided a lifeline to many businesses and allowed them to continue paying employees for months, even if the business was shuttered. Congress also empowered the Small Business Administration to forgive many loans if certain conditions were met.
With so much free money available, PPP was ripe for fraud. The Department of Justice (DOJ) has aggressively pursued those suspected of abusing the system and announced on March 26, 2021 it was prosecuting 474 defendants. At O’Mara Law Group, we stay on the cutting edge of federal prosecutions and are available to talk with members of the business community under threat of investigation. Please contact our Tampa PPPL fraud lawyers today if you need assistance defending yourself against PPPL fraud charges.
Signs of PPP Loan Fraud
The DOJ has begun carefully reviewing thousands of cases, looking for certain red flags that might indicate fraud, such as:
- Using PPP funds for non-payroll purposes, such as personal use.
- Failing to deposit PPP funds into a separate bank account, which increases the risk of inappropriate use.
- Submitting loan applications to multiple lenders, called “stacking” loans.
- Lying on application documents, e.g., claiming they have fewer employees than they do.
Some of this conduct might be innocent. For example, a company might include inaccurate information on an application negligently, or money might accidentally be deposited in the wrong account. The feds are looking for evidence that defendants committed acts knowing they were fraudulent.
Federal Laws that Apply to PPP Fraud
There is no criminal enforcement provision in the Congressional act that created the PPP program. Nevertheless, federal prosecutors have had success relying on existing fraud laws to prosecute individuals. For example, the DOJ has used:
- Bank fraud
- Mail fraud
- Wire fraud
- False claims
- Tax evasion
- Other laws
Penalties for convictions are stiff. Someone convicted of bank fraud, for example, could face up to 30 years in jail and $1,000,000 in fines.
How to Defend Against a PPPL Fraud Charge
The cornerstone of any fraud case is the defendant’s state of mind at the time he or she committed suspicious acts. In particular, defendants must have intentionally or knowingly committed the fraud. Put simply, innocent mistakes or simple carelessness does not rise to the level of fraud. If a defendant accidentally submitted a PPP application to multiple banks, this conduct is not fraudulent. The same is true if they accidentally reported inaccurate information in their loan application.
A defendant’s mental state is hard to prove. Nevertheless, defendants often make admissions which the DOJ uses against them later in court. If you receive a phone call or knock on the door, refuse to speak with the federal investigator and secure legal counsel instead.
Contact a Tampa PPPL Defense Lawyer Today
Prosecutors often bring fraud cases to garner good press, but many innocent people can get caught up in the net. Because so much is at stake, any suspect should obtain the help of a seasoned PPL defense attorney in Tampa. Please contact O’Mara Law Group today.