Although most of the panic around the COVI-19 pandemic has subsided, some issues continue to linger. One remaining effect of the pandemic has been the ongoing targeting and prosecution of fraud stemming from federal relief programs for American businesses. If you were involved in these loans at all, it is important to know how the investigators and prosecutors handle these cases.
Federal loan assistance programs
The federal government responded to the pandemic with significant relief for businesses, mostly in the form of tax credits and low-interest or forgivable loans for small and medium sized businesses.
Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, two trillion dollars went to helping the American economy avoid a serious financial recession or depression in the wake of the Coronavirus pandemic. As part of the CARES Act bill, hundreds of billions of dollars went to loans for small and medium sized businesses throughout the country.
Two of the most prominent loans involved were the Paycheck Protection Program (PPP) loans and the Economic Injury Disaster Loans (EIDL).
Rampant fraud cases
As could have been predicted, the administration of these loans left federal funding open to rampant cases of fraud. Federal investigators and prosecutors are taking extremely aggressive measures to recoup the funds that have been lost.
Although there have been aggressive efforts to prosecute COVID fraud cases for more than a year now, there has been a significant uptick of these efforts in recent months.
The FBI, the Treasury Department, Secret Service and other federal law enforcement agencies are involved in uncovering any business, individual or entity that have obtained fraudulent funds from PPP or EIDL loans. The Department of Justice is doing its part by prosecuting these allegations aggressively, seeking significant sentences.
Who are they targeting?
Given media accounts and other information learned through investigations, the feds are seemingly targeting individuals who obtained PPP or EIDL loans for defunct or inactive corporations/entities, particularly where it appears that entities were recently created, previously involuntarily dissolved, or there is reason to believe that they do not employ the number or employees or conduct business in the manner set forth in the loan applications. It also appears that individuals who process the loans or assist others in obtaining fraudulent loans are being targeted for prosecution.
Using complex algorithms and data tracking, the FBI and other investigative agencies can use the evidence of one purportedly fraudulent loan to uncover the source of that loan, in order to possibly uncover multiple violations from the same individual or individuals.
The federal government is taking an extremely aggressive, wide-net approach to uncovering any instances of possible fraud, and they are prosecuting these cases aggressively. They are moving quickly and seeking harsh penalties upon conviction.
When defending against charges of this kind, it is critical to work with a criminal defense lawyer who know how to fight these charges and can find ways to win. Contact attorney Darryl A. Goldberg for strong and experienced defense against fraud charges.