Recently we have written articles related to the continuous federal prosecution the Justice Department has engaged in related to the Small Business Administration’s (SBA) Paycheck Protection Program (PPP). PPP Fraud is an umbrella term for fraudulently seeking the funds of the SBA’s program unlawfully. After the COVID-19 Pandemic caused economic upheaval, the federal government stepped in and instituted a relief program designed to help small and medium-sized businesses retain employees and pay their bills. The quickness with which the pandemic took hold caused the government to disregard conventional anti-fraud methods in lieu of quick relief. Fraud and misrepresented loans were expected due to the relaxed approval methods and as 2020 ended and the new year began, the scope of the fraud has been continuously reported.
What is PPP related fraud?
When the federal government prosecutes individuals and businesses against fraud the charges are usually related to well-established anti-fraud statutes. Normally this can come in three forms: Wire Fraud, Bank Fraud, and Fraud against the US.
Wire Fraud is the use of communication channels, that is phone, cellphone, email, text message, and other methods, to defraud individuals or businesses.
Bank Fraud is a broad term that can be summarized as defrauding a financial institution through false pretenses or representations.
Fraud against the US is a charge brought against someone accused of making false claims, misusing funds, and/or scamming the government of funds or programs.
PPP-related fraud and subsequent charges are brought against individuals who are accused of defrauding the SBA’s program. Usually, these charges are brought against individuals and firms who have misrepresented facts and claims in order to receive PPP government-backed loans. An individual or firm might claim they have false expenses or a false number of employees.
Common businesses being charged for PPP Fraud
The SBA and countless financial institutions have disbursed hundreds of billions of dollars in federally backed loans since the PPP program commenced. Businesses of all types have been able to stay afloat thanks to these loans. News outlets have nonetheless reported on trends that have been found related to common types of businesses that have been investigated or charged for PPP Fraud. In September of this year in Atlanta, Georgia, the Justice Department prosecuted a high-profile individual for PPP Fraud related to his trucking business. Before that, in July of this year, a duo in Utah was sentenced to 12 months and 36 months respectively for unlawfully obtaining $200,000+ for their trucking business. July also saw the prosecution of a California trucking business owner indicted for unlawfully obtaining $600,000+ from the Paycheck Protection Program. Trucking, transportation, and logistics businesses were particularly hit by the pandemic due to the health and economic restrictions put in place. As such over 100,000 trucking companies applied for PPP loans. This makes trucking a prime target for fraudsters. Therefore, a large number of truck loan applications has also given way to many cases of prosecution for fraud. We have also previously written about a trend that shows an excessive number of ‘farms’ claims under PPP across the country and is also being targeted by the Justice Department’s PPP fraud task force.
Protect yourself. Contact us.
If you have been falsely accused or charged with PPP-related fraud then your best bet to beat these charges is to contact a highly respected attorney like those at The Arora Law Firm. If you have been a victim of PPP fraud, falsely accused of PPP fraud, or need defense by an experienced attorney against charges of fraud or other white-collar crimes. Contact Us. The Arora Law Firm has years of experience and years of success in this legal area.