Is PPP Fraud a Federal Crime?

In 2020, Congress made Paycheck Protection Program (PPP) loans available to businesses struggling with the economic effects of the pandemic. Since this program began, there have been reports of PPP fraud cases. The federal government investigated many of these cases.

Does this mean PPP fraud is a federal crime?

Here’s what you need to know about PPP fraud, as well as what to expect should you face accusations of fraud.

What Is PPP Fraud?

The CARES Act established the Paycheck Protection Program as part of the relief effort for small businesses affected by COVID-19.

To receive a loan under this program, businesses had to provide a detailed application to the US Small Business Administration (SBA). This application includes financial records and other documents that certify that the business meets certain requirements and can use the loan for eligible expenses.

If any part of an application is found to be fraudulent or false, it could constitute PPP fraud. Even if you did not intend to commit fraud, doing so could result in criminal charges under federal law.

For example, misrepresenting payroll costs or lying on an application about employees that do not exist are both forms of PPP fraud.

Is It A Federal Crime?

Yes.

Committing PPP fraud is considered a federal crime and carries significant penalties if convicted.

It is illegal to knowingly devise “any scheme or artifice” with the intent to defraud or obtain money from another person through false pretenses or representations. This same statute also applies to any attempts at mail fraud – something that also might be used in some cases involving PPP loans.

The punishment for violating this provision can include up to 20 years in prison along with fines upwards of one million dollars per count charged against you.

Remember, any form of misrepresentation on an application for a loan under the PPP can lead to serious legal consequences. This includes possible jail time and hefty fines if convicted in a court of law.

It’s essential to understand exactly what kind of information you should provide when applying for these types of loans. You must also be completely honest on your application. This reduces the risk of PPP fraud accusations.

Contact an Attorney If You’ve Been Accused of PPP Fraud

An experienced attorney can help you avoid many of the pitfalls associated with applying for a PPP loan. An attorney protects you from any potential criminal prosecution should your application come under scrutiny.

By understanding how your actions may be seen as criminal violations, you can better protect yourself. An attorney will be at your side, should your case move forward.

Furthermore, if you’ve been accused of PPP fraud, an experienced attorney can help you deal with the situation. They’ll ensure your rights are protected. They’ll also help you build the strongest defense possible based on the circumstances of your case.

For more information or to schedule a consultation to discuss potential accusations of PPP fraud, contact David Lindsey.