Los Angeles PPP Fraud Defense Lawyers
The Paycheck Protection Program (PPP) is a federal loan program that was designed to help businesses keep their workforces employed during the pandemic. Until May 31, 2021, certain businesses that met specific qualifications could apply for a PPP loan backed by the Small Business Administration (SBA) at a low interest rate of 1%. Borrowers that met certain conditions could qualify for full loan forgiveness. Currently, individuals in different states are facing criminal charges for fraud involving the Paycheck Protection Program.
Federal prosecutors are pursuing criminal charges for identity theft, tax evasion, mail fraud, wire fraud, and bank fraud in connection with PPP loans. PPP loan fraud cases involve allegations of defendants:
- Lying on PPP loan applications
- Falsifying business or tax records
- Using PPP loans for unauthorized purposes
- Loan stacking (receiving PPP funds from more than one lender)
- Concealing or misrepresenting information during a PPP audit or investigation
The federal government has made it clear that it intends to investigate and prosecute business owners and individuals who fraudulently obtained or attempted to obtain PPP funds. Press releases regarding prosecution of people charged with PPP and COVID-Relief fraud have been issued by the U.S. Department of Justice (DOJ).
The CARES Act under which the program was funded was intended to provide relief to companies and individuals affected by the COVID-19 pandemic. The Paycheck Protection Program was funded with nearly $350 billion in federal money. Participating lenders were immediately flooded with applicants, the program ran out of funds, and many companies that should have been eligible were unable to receive loans. As a result, companies that were able to receive PPP loans are currently under scrutiny by federal authorities.
Potential penalties for PPP fraud will depend on the specific charges arising from a loan fraud investigation. For example, defendants may face the following penalties upon conviction of the following charges:
- Tax evasion: Fine of up to $100,000 for an individual or $500,000 for a corporation and up to five years in federal prison.
- Bank fraud: Fine of up to $1 million and a federal prison sentence of 30 years.
- Making false statements to the SBA or making false statements to an FDIC-insured bank: Fine of up to $1 million and 30 years in federal prison.
- Making false statements to federal agents: Statutory fines and up to five years in federal prison.
- Wire fraud: Statutory fines and up to 20 years in federal prison.
- Aggravated identity theft: Additional penalty of up to two years imprisonment.
- Conspiracy: Statutory fines and up to five years federal imprisonment, plus the same penalties as prescribed for the underlying offense.
- Attempt: The same penalties as prescribed for the criminal offense that was attempted.
Federal agencies are looking back in an effort to identify companies that received PPP funds unlawfully. As the near immediate depletion of PPP funds was the subject of widespread negative publicity, the risk of prosecution is high. If you or your company is targeted for PPP fraud, it is important to retain experienced Los Angeles criminal defense lawyers to help mitigate the risk of substantial penalties.
At Werksman Jackson & Quinn LLP, we handle many challenging, high-profile cases. Mark Werksman is well-known for his federal defense work. He is a former Deputy District Attorney and former Assistant United States Attorney.
Our firm was founded in 1994. We offer a free initial consultation. Call us at (213) 688-0460 for skilled legal defense against Los Angeles PPP fraud charges.
Recent Case Results
- Complete Dismissal of Molestation Charges
Attorney Mark Werksman’s 29 year old client was falsely accused of molesting two neighborhood children and was subsequently charged with felony child molestation, with a significant prison sentence hanging over his head should he be convicted. Instead, at the preliminary hearing Werksman was able to convince the court to grant his client a complete dismissal of any charges.
- Decision Set Aside
Client, a college student in a faulty Title IX case, was awarded $130,000 in attorney fees.
- Probation with No Jail Time for Drug Money Laundering Charge
Wilmington man accused in New York federal court of laundering drug money through the sale of laptop computers. Mark was able to get the case transferred to federal court in Los Angeles, where he convinced the United States Attorney to reduce the charges. His client was sentenced to probation with no jail time on a misdemeanor conviction.