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PPP Fraud


The Paycheck Protection Program (PPP) was introduced as part of the CARES Act, rolled out in March 2020 to provide support to small and mid-sized businesses economically impacted by the COVID-19 pandemic.  

Despite an initial budget of $350 billion, the federal funds allocated for PPP were exhausted in less than two weeks, leaving many eligible businesses without funding.  

Federal authorities are now taking a closer look at how this money ran out so quickly, and whether fraud played a role in its speedy disbursal.

Growing Numbers of PPP Fraud Cases

A staggering number of businesses are having PPP loan fraud investigations brought against them by the federal government, and these numbers are expected to continue growing.

Reasons a business may be investigated (and found guilty of) PPP loan fraud include: 

  • Receiving PPP loans from multiple lenders
  • Misrepresenting eligibility criteria on PPP loan applications
  • Fraudulent use of PPP funds
  • Loan forgiveness certification fraud 

If you’re concerned that your business might have engaged in practices that constitute PPP loan fraud, stay ahead of a federal investigation by contacting a federal defense attorney immediately. 

Federal Penalties for PPP Fraud

PPP fraud can occur intentionally or unintentionally. While some companies may have knowingly engaged in fraudulent business practices regarding the PPP loan program, others may not have realized their actions were illegal. 

But intentional or not, PPP fraud is a federal crime. If a federal investigation determines that a company committed PPP loan fraud, the individuals responsible can face criminal charges that include: 

  • Bank fraud
  • Tax evasion
  • Wire fraud
  • Aggravated identity theft
  • Making false statements to the Small Business Administration
  • Making false statements to an FDIC-insured bank
  • Making false statements to federal agents

Business owners and executives found guilty of PPP loan fraud can face heavy penalties that include hefty fines and potentially decades of prison time. 

Responding to a PPP Fraud Investigation

A business can learn they’re under federal investigation for PPP fraud in a variety of ways, including: 

  • Written notices
  • In-person visits by federal agents
  • Frozen assets or bank accounts

A swift response is crucial to mitigating the possible damage that can come from a federal investigation. As soon as it becomes apparent that an investigation is underway, a company should immediately contact a federal defense attorney to begin building a defense before the investigation progresses to criminal charges.

PPP Whistleblower Protection

A defense attorney can help you report illegal activity while protecting your own interests if you believe your employer is guilty of PPP loan fraud.

Employees who report the illegal activities of their employers are protected under the False Claims Act. However, reporting PPP fraud without an attorney’s help can be a costly mistake. Without legal representation, a whistleblower may have to contend with illegal employer retaliation.

Furthermore, a lawyer can submit a False Claims Act lawsuit on your behalf; if successful, such a lawsuit can bring a financial reward for whistleblowing. Directly reporting PPP loan fraud to the government doesn’t bring the same opportunity for monetary reward. 

Contact Shrader Mendez & O’Connell, Attorneys at Law 

For more information about PPP loan fraud, call (813) 360-1529 to speak with an experienced defense attorney at Shrader Mendez & O’Connell, Attorneys at Law.