PPP Loan Fraud Investigations

PPP Loan Fraud Investigations

If you or your business are under investigation for, or have been charged with, alleged fraud involving the United States Small Business Administration (SBA) Paycheck Protection Program (PPP), you need the skilled, experienced PPP Loan Fraud defense attorneys of Burnham and Gorokhov, PLLC, representing you as soon as possible.

What Is the PPP?

In late March 2020, in the midst of the social and economic disruption caused by the COVID-19 pandemic, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act. A major component of the Act was the PPP, intended to provide businesses the funds to keep their employees on the payroll while they were not able to bring in revenue as they had before the pandemic. These loans were eventually meant to be forgiven provided that borrowers had documented their eligible spending. Between 2020 and 2021, almost $800 billion was distributed to more than 10 million businesses, with relatively little oversight.

What Constitutes PPP Loan Fraud?

PPP loan fraud charges could result from issues such as:

  1. Using the loan funds for ineligible business expenses. Loans were only intended to cover payroll, rent, utilities, or mortgage interest.
  2. Using the loan funds for fraudulent purposes. These would be purposes entirely unrelated to business concerns, like personal purchases.
  3. Receiving loans from multiple lenders, also known as “loan stacking.”
  4. Providing false information during the loan application process, loan certification process, or loan forgiveness process.
  5. Providing false or misleading information, or concealing information, during a PPP audit or other investigation.

PPP Fraud Charges in the News

As the confusion of the early days of the pandemic waned and loan forgiveness was sought by applicants, the Government has begun aggressively flagging and investigating suspect PPP loan applications and awards. In late September 2022, the Department of Justice (DoJ) announced the creation of “Strike Force Teams” to prosecute pandemic aid fraud, including fraud involving PPP loans. Some estimates state that almost a quarter of loan recipients may have committed fraud and that almost $100 billion may have been lost to fraud.

With so much at stake, it is unsurprising that DoJ has taken an aggressive approach to these cases.

Experienced White Collar Defense Attorneys for PPP Cases

At Burnham and Gorokhov, PLLC, we bring the same approach to PPP fraud case defense as we do to all white collar cases faced by our clients: we work to minimize the likelihood a client will ever be charged while preparing for a vigorous defense in court if absolutely necessary.

In our approach, it is ideal if we become involved in a client’s defense as early as possible, during the investigation phase, allowing us to advocate for reduced charges or none at all. We can then apply the full force of our experience and discretion to develop a unique strategy to protect our client’s best interest, taking care to thoroughly parse the facts and law of each and every case we take.

If you are, or you believe you may be, the subject of an investigation into PPP loan fraud, get in contact with our office as soon as possible to discuss your concerns.

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