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Trombley & Hanes Tampa Criminal Lawyer
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COVID-19 Fraud Defense – What To Do If Your Business Is Accused Of Fraud Under The CARES Act

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When COVID-19 restrictions sent shockwaves through businesses across Florida and the rest of the U.S., the Federal Government acted by establishing the Paycheck Protection Program, among other measures. The Paycheck Protection Program (PPP) was a loan program established within the Coronavirus Aid, Relief and Economic Security Act (CARES) Act to help small businesses keep their workforces employed during the COVID-19 pandemic. All told, the CARES Act authorized billions of dollars in forgivable loans to small businesses between March 2020 and May 2021.

To qualify, business owners had to use at least 60 percent of the loan for payroll and employee benefit costs, and the remainder to cover costs such as rent, mortgage, utilities, operating expenses, and other business-related payments. Applicants also had to certify that they only applied for one PPP loan prior to the end of 2020. Crucially for business operators, the Payroll Protection Program allowed the interest and principal on loans to be forgiven if the business spent proceeds on certain expense items within a designated time, and used a certain percentage of the loan on payroll expenses.

For most Tampa-area business owners that applied, these loans provided a critical lifeline during a period of unprecedented financial uncertainty. Some criminal opportunists took advantage of the PPP loan process, however, to enrich themselves and defraud the government. Stories abound of schemers filing falsified applications to obtain PPP funding, even using PPP loan money to buy themselves Lamborghinis, Rolex watches, and designer clothes.

Government Crackdown on Fraudulent PPP Applications

In response to widespread reports of fraud, the Attorney General established the COVID-19 Fraud Enforcement Task Force to “marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud.”

Through December 2021, the Department of Justice states its Fraud Section has “prosecuted over 150 defendants in more than 95 criminal cases and has seized over $75 million in cash proceeds derived from fraudulently obtained PPP funds, as well as numerous real estate properties and luxury items purchased with such proceeds.” Over time, the numbers of arrests and convictions will increase, along with additional millions seized by the U.S. government in response to loan fraud during the pandemic.

It is no surprise that scammers took advantage of a federal loan program that was rushed out during a crisis and lacked certain anti-fraud safeguards and oversight from the Small Business Administration.

However, many well-intentioned business owners may find themselves in the crosshairs of investigation, as government prosecutors seek to recoup the millions of dollars misspent under the PPP program. A loan application containing mistaken oversights or omissions, for example, could lead to investigation, audits, and legal headaches for businesses that meant no harm in applying for and accepting PPP loans.

What Should I Do If I Am Investigated or Charged Under the PPP or CARES ACT? 

It is possible that you or your business may be accused of fraud under the Payroll Protection Program and CARES Act. This could be through no fault of your own, due to human error or an administrative error on the federal end. Regardless of the reason, the first thing you should do when accused of COVID-19 government assistance fraud is to contact an experienced Tampa law firm that can vigorously defend your rights and your business reputation.

Contact Our PPP Fraud and CARES ACT Fraud Defense Attorneys in Tampa Today

The Tampa COVID-19 fraud defense litigation attorneys of Trombley & Hanes, P.A., have decades of experience representing individuals and businesses accused of all manner of fraud, including government fraud. If you are accused of fraudulently obtaining COVID-19 funding under the PPP and other CARES Act programs, our experienced and dedicated defense lawyers in Tampa can assess your case for you today and discuss possible defense strategies. Contact Trombley & Hanes to learn more about our services.

Resource:

pogo.org/investigation/2021/04/red-flags-the-first-year-of-covid-19-loan-fraud-cases/

justice.gov/opa/pr/florida-woman-convicted-covid-19-relief-fraud

justice.gov/opa/pr/texas-woman-convicted-covid-19-relief-fraud

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