The CARES Act and Federal Fraud

 Posted on February 28, 2022 in Federal Crimes

The Coronavirus Aid, Relief, and Economic Security Act—commonly known as the “CARES Act” provided critical assistance to an enormous amount of American families and small businesses. This funding was designed to keep struggling people and small companies afloat in the midst of lockdowns and a general economic downturn during a public health crisis. Most businesses used these emergency relief loans to manage expenses - like payroll - that they otherwise would not have been able to cover during the pandemic. However, there have also been a large number of fraud accusations relating to misused funding. As the nation adjusts to COVID as an endemic disease, moving away from the panic of a pandemic, the federal government is beginning to crack down on those who fraudulently claimed or used these funds.

If you used CARES Act funds and are now being accused of fraud, it is important that you promptly reach out to a qualified federal crimes attorney. These cases are now being investigated and prosecuted at a much higher rate than they were during the height of the pandemic.

How CARES Act Fraud Schemes Worked

CARES Act fraud took a number of forms during the pandemic. Some business owners in particular effectively defrauded the federal government by doing things like:

• Fake businesses - Federal agents are beginning to discover that some emergency loan money was paid out or applied for by fictitious entities to support fictitious employees. A Kentucky man was recently sentenced in federal court after making up both a car detailing business and a barbershop that did not exist.
• Business owner identity theft - Small business owners became popular targets for identity theft. A fraudster would obtain a business owner’s personal information to apply for a federal COVID relief loan, and then have it sent to his own bank account. An Oregon man was recently caught and sent to federal prison for this type of scheme after the actual business owner noticed and reported the fraud.
• Pocketing funds - This type of scheme was typically perpetrated by legitimate if unscrupulous business owners. Some small business owners alleged that they needed the funds in order to keep paying employees during lockdowns but failed to do so and instead pocketed the funds. An Oklahoma woman was recently sentenced after claiming she needed the funds to pay her employees, but instead using them to purchase a luxury vehicle for herself.

These are just a few examples of the ways white-collar criminals used these emergency federal loans fraudulently. While enforcement was difficult during the pandemic, the FBI has now begun pursuing these cases aggressively.

Call a Chicago Federal Fraud Attorney

If you have been charged with fraud related to the CARES Act, Law Offices of Hal M. Garfinkel LLC, Chicago Criminal Defense Attorney has the experience needed to put on a strong defense. Our Chicago federal fraud lawyers will fight for the best possible outcome in your case. Call 312-629-0669 for a free consultation.

Source:

https://www.justice.gov/usao-or/pr/former-lake-oswego-resident-sentenced-federal-prison-covid-relief-fraud