Tampa PPP Loan Fraud Defense Lawyer

The Paycheck Protection Program (PPP) is a huge piece of the government’s $2.2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act spending, with over $680 billion sent to small businesses to help them cope with the economic setbacks brought on by the COVID-19 pandemic. PPP comes in the form of forgivable loans from the Small Business Administration (SBA), which businesses can use to keep or rehire employees laid off due to shutdowns. The loans are 100% forgivable if used to cover payroll costs and other eligible expenses while keeping employees on the payroll and maintaining their pay at pre-COVID-19 salary levels. PPE loans require recipients to devote at least 60% of the loan toward payroll costs, while the remainder can be spent for other qualifying purposes such as paying interest on mortgages and covering rent and utilities.

The SBA has made over 7.5 million PPP loans totaling over $687 billion. Anticipating fraud from such a large-scale program, the Department of Justice (DOJ) immediately began investigating and enforcing allegations of fraud. In the first year of the CARES Act’s existence, DOJ charged roughly 100 defendants, alleging over $260 million of PPP fraud.

The Tampa PPP Loan fraud defense lawyers of Trombley & Hanes, P.A. in Tampa have decades of experience defending small business owners charged with health care fraud, government contracting fraud and related offenses. As former prosecutors, the firm’s lawyers are intimately familiar with relevant federal fraud statutes and their prosecution and defense. Since the onset of the current pandemic, the firm has taken on a wide range of COVID-19 fraud defense litigation, including programs under the CARES Act such as the Paycheck Protection Program. The firm represents clients charged with both criminal and civil liability in these areas.

Criminal Enforcement of PPP Loan Fraud Charges

The PPP itself is not a criminal statute and does not provide for criminal enforcement related to PPP loans. Loan recipients who do not meet the requirements of the program for loan forgiveness must repay the loans with interest, but they are not otherwise subject to criminal or civil liability under the CARES Act. DOJ prosecutions for PPP loan fraud instead rely on other federal statutes that outlaw certain kinds of white collar crime. Depending on how the loan was arranged for or what type of misconduct is alleged, an individual could be charged with PPP loan fraud under any number of federal statutes, including:

  • Conspiring to commit an offense or defraud the United States ((18 U.S.C. 371)
  • Knowingly making false statements to the Small Business Administration (18 U.S.C. 1014)
  • Mail Fraud (18 U.S.C. § 1341)
  • Wire Fraud (18 U.S.C § 1343)
  • Bank Fraud (18 U.S.C § 1344)
  • and many others

These laws carry penalties ranging from five years in prison and fines up to $100,000 to up to 30 years imprisonment and up to a million dollars in fines. Trombley & Hanes, P.A. is experienced in the prosecution and defense of many of these and related offenses and offers a vigorous defense against the crimes charged.

Civil Enforcement of PPP Loan Fraud Allegations

In addition to going after defendants with criminal complaints for fraud, the DOJ has also sought civil liability under the federal False Claims Act (FCA) and the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA). Penalties under the FCA can range from more than $11,000 to over $23,000 per violation, while FIRREA penalties can top one million dollars for a single violation. FIRREA claims require the government to prove a predicate offense under one of 14 different statutes; in cases under five of those statutes, the government must further prove fraud “affecting” a federal financial institution. FCA claims can be brought by individuals on behalf of the government (qui tam or whistleblower claims) with or without government assistance or intervention.

Vigorous PPP Loan Fraud Defense in Tampa and Beyond

For strong and effective defense of PPP loan fraud charges based on an intimate knowledge of the law and professional experience dealing with federal white collar criminal defense and civil fraud litigation, call Trombley & Hanes, P.A. in Tampa at 813-229-7918.

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Frequently Asked Questions for PPP Loan Fraud Defense in Tampa

What are the Most Common Types of Paycheck Protection Program Fraud Charges?

The Paycheck Protection Program (PPP) was a government initiative in the United States designed to provide financial relief to small businesses during the COVID-19 pandemic.

The Small Business Administration (SBA) and the Department of Justice (DOJ) have actively investigated and prosecuted cases of PPP loan fraud, and continue to investigate potential fraud cases nationwide.

Some of the most common cases have involved individuals and companies alleged to have:

  • Applying for a PPP loan for a business that was not operational or was not in existence before the pandemic.
  • Applying for PPP loans from multiple lenders or submitting numerous loan applications for the same business, potentially receiving funds from various sources.
  • Certifying falsely that the business will retain or rehire employees when they intend to lay off or terminate them.
  • Colluding with employees, lenders, or other parties to facilitate fraudulent loan applications or misuse of funds.
  • Creating fake or inactive companies to apply for multiple PPP loans and receive funds for nonexistent businesses.
  • Falsely claiming the existence of employees who do not work for the business to inflate the payroll costs and obtain a more significant loan amount.
  • Providing altered or fabricated payroll records to support the loan application and justify loan amounts.
  • Providing false information on the PPP loan application, including inflating the number of employees or misrepresenting payroll costs to qualify for a more significant loan amount.
  • Using PPP loan funds for unauthorized purposes, such as personal expenses, luxury purchases, or unrelated business expenses.
  • Using stolen or fraudulent identities to apply for PPP loans and receive funds on behalf of someone else.

These allegations are being pursued through federal criminal charges, including bank fraud, wire fraud, mail fraud, and conspiring to commit an offense or defraud the United States. Convictions for these charges carry significant jail time, restitution orders, and heavy fines. If you are being investigated for unlawfully obtaining funds associated with the CARES Act, contact our experienced PPP loan fraud defense attorneys in Tampa today for help with your case.

Can Individuals and Businesses Be Charged with PPP Fraud?

Individuals and entities who engage in fraudulent activities related to PPP loans can be charged with PPP loan fraud. That may include, but is not limited to:

  • Business Owners.
  • Company Executives.
  • Loan Applicants.
  • Accountants and Financial Advisors.
  • Employees and Insiders.
  • Lenders and Bank Employees.
  • Third-Party Service Providers.

If you are being investigated for, or have been charged with PPP loan fraud, contact our PPP loan fraud defense lawyer in Tampa today to learn how we can devise a customized defense strategy for your unique legal circumstances.

What are the Most Common Defenses for PPP Fraud?

Each PPP fraud case is unique and requires a thorough review before implementing a customized defense strategy. However, some of the most common defenses against PPP fraud charges may include lack of intent to defraud, demonstrating that the loan or benefit was obtained legitimately, challenging the accuracy of the evidence, proving compliance with program requirements, and showing that any discrepancies were unintentional. Our PPP fraud defense lawyers in Tampa have the knowledge, skills, and resources you need to mount a proper defense to achieve the best outcome for your case. Call us today to schedule an initial case assessment so that we can get started.

Which Agencies are Conducting PPP Loan Fraud Investigations?

PPP loan fraud investigations are conducted by various government agencies, including the Small Business Administration (SBA), the Department of Justice (DOJ), the Federal Bureau of Investigation (FBI), and other law enforcement agencies. The consequences of being charged and convicted of PPP loan fraud can include significant fines, imprisonment, restitution, and damage to professional reputations and operations, and should be taken very seriously.

With a trusted PPP loan fraud defense attorney in Tampa by your side, you will understand all your legal rights and options to make informed decisions about the direction of your case. Contact us today to learn more.

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