The Paycheck Protection Program is a government loan program established through the CARES Act for businesses who employ less than 500 people to gain assistance because of the impact of COVID-19. Small businesses are eligible for up to $10,000,000 to cover expenses such as payroll, mortgages, rent and utilities. The debt is forgivable if the money goes towards these “qualified expenses”.
Committing PPP loan fraud is to take advantage of the loan program and CARES Act by dishonestly obtaining money. You may face guilt of PPP loan fraud if you purposely obtain or attempt to obtain funds through the CARES Act.
Filing errors. Often, potential fraud allegations arise not from malicious intent, but from simple reporting errors. For example, misstating the number of employees or overstating payroll costs can appear as fraud. It is important to carefully review all information on the filing form to avoid mistakes that could lead to charges.
Demonstrate good faith. If authorities accuse you of PPP loan fraud, presenting evidence of good faith may be key to your defense. For example, if you made mistakes inadvertently and without intent to defraud the program, this may provide grounds for acquittal. It is also important to preserve all documents and correspondence with financial institutions. Incorrect data in reports or bank statements can lead to suspicions of fraud.
What to do if you are accused of fraud. It is important to seek legal counsel immediately. The attorneys at KAASS LAW can help you understand complex legal issues and develop a defense strategy. Loan fraud charges can result in serious fines and jail time. Therefore, it is important to act quickly and effectively. The assistance of an attorney in such a situation can significantly affect the outcome of the case. An attorney can:
Under the Small Business Act, PPP loan fraud is charged as a federal crime. If convicted for making false statements or overvaluing securities you face felony charges punishable by:
If a person faces embezzlement charges under PPP loan fraud, they may face:
Defenses against a PPP loan fraud violation may include:
The Office of the Special Inspector General for Pandemic Recovery is in charge of all PPP loan fraud investigations. All charges are prosecuted by the Department of Justice.
Remember that even if your intention was not to commit fraud, legal defense is necessary to minimize risks. If you need advice on PPP loan fraud, contact the attorneys at KAASS LAW. We will provide you with professional assistance and protection of your interests. You may call our office at (310) 943-1171 or by filling out the contact form below.
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