May 14, 2020 was the deadline for “undeserving recipients” to return funds received by the Payroll Protection Program (PPP) with no repercussions. Beginning on May 15, 2020, the IRS and the small business administration (SBA) began auditing many of those PPP loans. The federal government is now prosecuting many of these individuals for fraud.

Who will be investigated by federal law enforcement?

After relaxing restrictions for eligibility to receive funds through the PPP, institutions were able to provide the loans quickly with little real oversight or review.  As a result, the government is now left with hundreds of cases that are under investigation for fraud.  Many of these investigations, in turn, will become prosecutions in Federal court.

Individuals and corporations who may not meet the eligibility standards for a PPP loan will be investigated and prosecuted for fraud. Instances of fraud involving phantom employees for businesses, businesses not actually owned by applicants, and recipients who have made false statements to obtain a loan are already being prosecuted across the United States.

If you think you are going to be investigated

Many who face fraud charges know that they are coming. If you suspect that you may be facing charges because of your PPP loan, you need to act quickly. Contacting an attorney as soon as possible when you suspect an investigation exists will give you more time to prepare for your defense.

Regardless, when law enforcement approaches you, you do not have to answer any questions without talking to your lawyer. Always assert your right to have your lawyer present.

 

Defending against accusations of federal wire or loan fraud

By the Law Offices of Paul D. Petruzzi, P.A. | May 21,2020 | Federal Criminal Defense

Any type of transaction involves an inherent level of risk. From time-to-time that risk includes investigation and prosecution by law enforcement against accusations of fraud. Many of our current and former clients have found themselves facing such accusations. So if you are in the same position, it is important to know what legally qualifies as fraudulent activity.

Defining Fraud

Unfortunately, federal law covers a broad spectrum when it comes to fraud. According to the U.S. Department of Justice, no set statute exists outlining its basic elements. Rather, the DOJ cities court rulings, some stating that fraud “needs no definition; it is as old as falsehood and as versatile as human ingenuity,” while others attempt to offer it some context by stating that it involves the following:

  • False representations
  • Dishonesty
  • Deceit

Yet while no set definition exists, one element common to every fraud case is intent. You need to display an intent to defraud someone of money or property to merit such a charge.

Proving intent

This is where proving fraud can be tricky. Unless your actions blatantly display intent, you can always argue that despite the outcome of an agreement or a transaction, you were operating in good faith when dealing with whomever is accusing you of fraud. A market downturn, an unforeseen financial or regulatory hurdle, or even simple bad luck that result in financial losses does not mean that you intended to relieve someone of their assets (or benefit from your association).

You can learn more about responding to accusations of fraud by continuing to explore our site.

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