POSSIBLE CHARGES FOR PPP LOAN FRAUD

The Paycheck Protection Program (PPP) was created and designed to help and support small businesses to keep their workers on payroll, or to support any business-related expenses. The program provides and offers a variety of guaranteed loans up to a maximum amount of $10 million for eligible businesses only. Based on the reports and statistics of the total amount of loans since August 2020, more than 10 million loans totaling more than $750 billion have been issued under PPP. The program is part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. 

These loans have played an important role in helping small businesses cover almost everything, including: payroll, rent, utilities and a lot more other expenses as the Coronavirus affected their earnings.

However, whenever there is a lot of money being given, there has been a lot of confusion about the requirements, qualifications and most importantly eligibility. Businesses who want to apply for a PPP loan are required to meet a very specific criteria and requirements, and there are limits on how they can spend their loan funds. But if any chance that a business violates one of these requirements while applying or obtaining a PPP loan, they will be solely held liable to the charges of PPP loan fraud. 

The following are sample ways of how businesses have committed PPP loan fraud:

• Making a false statement on a PPP loan application
• Applying for PPP loan money from multiple lenders
• Using PPP loan money for unapproved purposes
• Submitting a false certification for PPP loan forgiveness
• Being dishonest during a PPP loan audit or investigation

If you lie on a PPP loan or omit information in this way, you can face grave penalties and a variety of criminal charges. Some of the charges you might face include:

Bank fraud

If the lie on your PPP loan is counted as deceiving a financial institution to profit, then you can be charged with bank fraud under U.S. Code Title 18 U.S.C. 1344. Bank fraud is considered a white collar crime, and the penalty varies from situation to situation. Typically, for an individual facing a misdemeanor for this crime, the bank fraud punishment can be up to one year in jail and up to $4000 in fines.

Wire fraud

If you have been found to use an interstate communications device, like a telephone, to defraud an institution in an attempt to gain funds from a PPP loan, you can be considered guilty of wire fraud. Penalties for wire fraud include a prison sentence of up to 20 years and restitution to those who were impacted.

Conspiracy to commit fraud

If you lie on a PPP loan in collaboration with another individual, you are more likely to be charged with conspiracy to commit fraud. This illegal act involves two or more people conspiring either to commit any offence against the U.S., and the charge comes with up to five years in federal prison and additional fees.

False statements to a financial institution

It is illegal to make false statements to a financial institution, so if you were to lie on a PPP loan, you could be charged with this federal crime. This act is criminalized under section 1014 and if convicted, you can face quite a hefty fine along with imprisonment for up to 30 years.

If you need any legal services please click here to fill out this form and someone from our firm will contact you within 24 hours. 

Nothing in this blog post should be taken as legal advice.