Paycheck Protection Program - PPP Loan - PPP Fraud | Amin Law

Описание: Paycheck Protection Program (PPP) Fraud

The Department of Justice, in coordination with a number of other federal investigative agencies, such as the IRS and FBI have been actively scrutinizing and investigating allegations of PPP fraud.

What Constitutes PPP Loan Fraud?
The following are some examples of actions that could result in criminal prosecution for PPP loan fraud:

• Using PPP funds for unauthorized purposes (i.e. personal expenses)

• Making bad-faith certifications on a PPP loan application, e.g. making a false statement.

• Inflating payroll costs in order to receive a higher loan amount

• Obtaining PPP funds from multiple lenders

• Firing or failing to rehire employees or cutting employee salaries, despite receiving PPP funds

• Underestimating the number of employees or misclassifying employees as independent contractors in order to qualify as a small business

• Misrepresenting or concealing information during a PPP audit or fraud investigation

PPP Fraud Crimes and Penalties

The Coronavirus Aid, Relief, and Economic Security ACT (also known as CARES ACT) does not contain provisions for criminal enforcement of the Paycheck Protection Program. As such, the Department of Justice has had to rely on pre-existing federal statutes in pursuing charges for PPP loan fraud. The following are some of the federal crimes the DOJ may pursue against those suspected of committing PPP fraud:

• Bank fraud (18 U.S.C § 1344) – A max. sentence of 30 years in prison and/or up to $1,000,000 in fines

• Wire fraud (18 U.S.C. § 1343) – A fine and/or a maximum term of imprisonment of 20 years (or 30 years, plus a maximum fine of $1,000,000, if the violation affects a financial institution or involves any benefit associated with a presidentially declared major disaster or emergency)

• Mail fraud (18 U.S.C. § 1341) – A fine and/or a maximum prison sentence of 20 years (or 30 years, plus a maximum fine of $1,000,000, if the violation affects a financial institution or involves any benefit associated with a presidentially declared major disaster or emergency)

• Making false statements to the SBA or a financial institution (18 U.S.C. § 1014) – Up to 30 years in prison and a fine of up to $1,000,000, or both
Making false statements to federal agents (18 U.S.C. § 1001) – maximum sentence of 5 years in prison and/or a fine

• Conspiracy to defraud the government (18 USC § 371) – A max. Sentence of 5 years in prison and/or a fine

• Tax evasion (26 U.S.C. § 7201) – up to 5 years in prison and/ or a fine of up to $100,000 (for an individual) or $500,000 (for a business)

Defenses:

Of course each crime will have a different set of potential defenses; however, for example, if you’re charged with wire fraud, some of the most common defenses include:

1. Lack of intent: E.g., specifically intended to commit fraud

2. Mistake of face: E.g., In good faith, you thought the information furnished on your application was actually true when in fact it was false.

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