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The Feds have begun to aggressively prosecute PPP fraud

On Behalf of | Mar 6, 2023 | Criminal Defense |

Whenever there’s an opportunity to gain access to money, bad actors tend to come out of the woodwork. That is exactly what happened when the federal government announced the Paycheck Protection Program or PPP loan program in April of 2020.

The stated idea was to take pressure off of businesses and insurance companies by providing a source of funding to manage payroll expenses during large-scale closures and layoffs. Companies could keep people working or at least keep providing wages despite the unprecedented circumstances.

The government granted roughly $800 billion in PPP loans, and a huge portion of them ended up in the wrong hands. Currently, the federal government has begun to aggressively investigate what looks like PPP fraud and prosecute those who misused PPP funds.

Those who have been accused face significant consequences

Every few weeks, the Department of Justice announces another indictment or plea related to PPP fraud. For example, there was recently a case out of Texas involving applications for more than $35 million in PPP funds. The guilty plea entered in this case puts the defendant at risk of up to 30 years in combined prison sentences.

Those accused of helping abuse the PPP loans could face federal prosecution and harsh sentences. There have even been cases of those who attempted to flee to avoid such penalties, like a California woman accused of involvement with a large-scale PPP fraud ring. The accused spent a year living as a fugitive before her extradition from Montenegro.

There are likely to be hundreds more prosecutions before the focus on this program runs its course. Anyone implicated in such fraud, even those who did not profit directly, could end up facing life-altering charges.

Innocent businesses may end up implicated

It is unfortunately quite common for small businesses to have questionable record-keeping practices simply due to a lack of staffing and organization. A failure to maintain enough internal documentation might mean that companies that secured PPP loans could be at risk of prosecution.

Anyone who has been accused of fraud involving federal programs could face massive financial penalties and incarceration. Discussing this situation with a legal professional and evaluating internal records will benefit those who are potentially facing criminal charges related to their PPP business loans.


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