Federal SBA Loan Fraud and PPP Fraud Criminal Defense Lawyers
Few areas are more regulated by federal law enforcement than the banking and financial industries. This is especially true with banking and financial programs designed to disburse money to individuals and businesses in times of need or during national disasters. Two such federal financial programs were created to help individuals and businesses affected by the COVID-19 pandemic when the Coronavirus Aid, Relief, and Economic Security (CARES) Act was made into law. First, nearly $350 billion in federal tax dollars was used to fund the Paycheck Protection Program (PPP). The program was designed to give financial assistance to small and medium-sized businesses impacted by Coronavirus. In addition to the PPP, the US government created the Economic Injury Disaster Loan (EIDL) program– which is another source of funding established through the Small Business Administration (SBA). This funding is ongoing.
If you are being prosecuted or you are under investigation for SBA loan fraud or PPP fraud, you need A federal Criminal Defense Law Firm On Your Side – (305) 330-3905
Since its creation, the CARES Act has been blamed (sometimes fairly, and sometimes not) for creating opportunities for possible fraud. As a result, and because billions of dollars were disbursed with little oversight, many loan recipients will be scrutinized or investigated by federal authorities for potential fraud. If you or your business are one of these targets of law enforcement, you need the advice and guidance of a federal criminal defense lawyer who is an expert in the field.
Several Federal and State law enforcement agencies are currently involved with active investigations of loan recipients who may have received fraudulent PPP loans or SBA EIDL program loans. In addition to the Department of Justice, these agencies include the FBI, IRS, and Secret Service and any business or individual targeted for receiving funds illegally, will undergo a criminal investigation that risks indictment and prosecution. Consequently, any individual or company undergoing such an investigation must consider hiring an experienced and skilled federal criminal defense attorney at a law firm specializing in federal criminal defense to minimize the risk of facing significant penalties.
Can participating in a government program become bank fraud?
Every federal loan program is governed by legal requirements that are used to both obtain program funding in the first instance, but also to identify potential bank fraud after funding is complete. The Paycheck Protection Program (PPP) and SBA EIDL Program are no exception. In general, criminal fraud charges may result from both deliberate misrepresentations as well as unintentional errors or omissions leading to the wrongful receipt of federal funds. Several different types of conduct may result in charges of PPP and/or EIDL loan fraud:
One type of potentially fraudulent conduct that is currently being pursued by law enforcement in the context of PPP and SBA loans involves the improper receipt of multiple loans from multiple lenders by the same applicant. Often referred to by federal law enforcement as “clone loans” or “loan stacking”, this type of offense is quite common. As an applicant may have filed more than one application either knowingly or unknowingly depending on the circumstances, careful attention must be paid to preparing a defense. This is because the receipt of loan funds is easily proven and any business or individual applying for, and or that received, multiple loans may be investigated and prosecuted and it is crucially important to unravel the circumstances surrounding the initial application(s).
The Paycheck Protection Program (PPP) and SBA EIDL program both require the satisfaction of certain criteria to obtain funding under the program. Individuals and companies applying for these loans are therefore required to certify certain facts as true. Thus, any business presenting materially false information on its initial PPP loan application is obviously far more likely to face prosecution. Information is materially false if it was relied on as true to fund the loan, but was not, in fact, true at the time of funding.
Improper Use of Loan Funds
Both the Paycheck Protection Program (PPP) and SBA, EIDL program require that funds disbursed under the program are used subject to existing guidelines. For example, companies that received loans under may be required to certify the funds are being used to reimburse payroll costs and benefits, utilities, mortgages and leases. If the funds are certified as such, but used for any purpose other than required, fraud may be alleged. To be sure, criminal charges can be filed where funds were obtained or used contrary to statute and the Department of Justice may seek millions of dollars in fines and years in prison for those convicted.
Obstructing an SBA Audit or DOJ Investigation
During any federal investigation, the Department of Justice or the relevant investigating agency such as the Secret Service, Federal Bureau of Investigation, Internal Revenue Service, or Office of Inspector General may seek information from involved individuals or corporate entities. During such investigations, investigative subpoenas may be issued, search warrants may be issued, searches and seizures may be conducted, and persons may be interviewed. During such legal processes, the persons or corporate entities involved must not make false statements (indeed, one should never make any statement without counsel) and/or withhold information nor fabricate information. Hiding relevant information, making misrepresentations, or doing anything to otherwise hinder or obstruct a lawful investigation may lead to prosecution.
What should you do if federal or state law enforcement is prosecuting or investigating you or your company for SBA or PPP loan fraud?
Federal loan disbursement requirements, rules, and regulations are often difficult to navigate. If you or your company are being investigated for bank fraud, federal loan fraud, PPP fraud, or SBA fraud, you need experienced and knowledgeable federal criminal defense counsel. Our federal criminal defense law firm is dedicated to representing individuals and corporations under investigation or already charged with Covid-19 pandemic-related crimes. If you are dealing with federal loan fraud allegations, contact us to protect your rights.
A Complimentary Initial Consultation with the Law Offices of Paul D. Petruzzi, P.A.
Our approach is simple. From the moment you come to our firm, we’ll explore the facts and determine which defense can yield the best possible result. At the Law Offices of Paul D. Petruzzi, P.A., we know you can’t afford the penalties, so we’ll do everything we can to help clear your name or reduce the charges and penalties you may face.
When you contact our firm, you will personally work with lead attorney Paul D. Petruzzi. Discuss your case in confidence with us. As a lawyer who has been selected to the Top 100 Trial Lawyers by The National Trial Lawyers and working with a team of collaborative and educated staff members, you can rest assured that your defense is in the right hands.
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Related Federal Criminal Practice Areas
- Fraud Offenses
- Bank Fraud
- Employee Theft
- Identity Theft
- IRS Fraud
- Loan Fraud
- Mail Fraud
- PPP Fraud
- SBA – EIDL Fraud
- Wire Fraud
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