Steps to Take if You are Being Investigated for PPP Fraud

 Posted on September 07, 2020 in Fraud

Earlier this year, the federal government rolled out the CARES Act, which included the Payroll Protection Program (PPP). The PPP was intended to help small business owners keep their employees on the payroll during the pandemic, and help them pay for other costs, such as utilities and rent. Now, it is being learned that many large businesses, such as Shake Shack, are improperly applying for and being granted these loans. Even smaller businesses may face federal charges if it is found out that they have not been using the funds appropriately. So, what should you do if you become the subject of a PPP investigation?

What Prompts a PPP Fraud Investigation?

Since the PPP was introduced, federal agencies have stated that auditing the loans, particularly those over the amount of $2 million, will be a priority for them. An audit will likely be conducted if the government suspects that the borrower lied about owning a business so they could fraudulently obtain a loan, or the borrower was deceptive about the number of employees they have in order to secure a larger amount.

To apply for a loan, business owners must also state in good faith that their current economic situation requires a loan so they can continue operations and keep their employees on staff. When the federal government suspects that a business owner did not act in good faith, it could also prompt an investigation.

What to Do if You Are Under Investigation

Most investigations for PPP fraud will begin with an audit conducted by the Small Business Administration, the agency responsible for overseeing the PPP. Due to this, if the SBA starts conducting an audit, it is a sign that you are under investigation for fraud. As soon as you suspect you are under investigation, you should:

• Call a federal criminal defense lawyer: Federal investigations are serious, and the consequences of being convicted of PPP fraud are harsh. A federal criminal defense lawyer can help you through the investigation and ensure your rights are always protected.
• Collect PPP documents: The loan applications and loan forgiveness application are crucial pieces of evidence in your case, as they will outline what you applied for, and the statements you made in your application.
• Collect business documents: In addition to your PPP documents, you should also collect any documents pertaining to your business, such as rent, utilities, and payroll records. These documents will help establish that you needed the funds you requested.
• Collect names of employees: Having a list of the names of your employees and their contact information can establish how many employees you have, and provide federal authorities with information if they want to speak to the employees about the money they have received.
• Detailed accounting of funds spent: Perhaps one of the most crucial pieces of evidence is a detailed listing of how you spent the funds, and how much you have spent on each item. This can show that you spent the funds honestly and in the manner the loan intended.

Call Our Chicago Federal Criminal Defense Lawyer if You are Under Investigation

More and more business owners are going to face PPP fraud investigations, and perhaps even charges. If you believe you are under investigation, call our skilled Chicago federal criminal defense lawyer at the Law Offices of Hal M. Garfinkel today. Attorney Garfinkel has the experience necessary in federal fraud cases to raise appropriate defenses and give you the best chance of retaining your freedom. Call us today at 312-629-0669 or contact us online to schedule a free consultation.

Source:

https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program